Form CMS-10137 Solicitation for Application for Medicare Prescription D

Solicitation for Applications for Medicare Prescription Drug Plan 2024 Contracts (CMS-10137)

2024 Part D Application PRA 30 Day CLEAN

Solicitation for Applications for Medicare Prescription Drug Plan 2024 Contracts

OMB: 0938-0936

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MEDICARE PRESCRIPTION DRUG BENEFIT
Solicitation for Applications for Medicare Prescription Drug Plan Contracts
New Medicare Prescription Drug Plan (PDP), Medicare Advantage-Prescription
Drug (MA-PD) (with and without EGWP), and Expansion of Existing Contracts with
CMS for PDP and MA-PD (including CCP, PFFS, RPPO, Cost Plan, SNPs and
EGWPs).
2024 Contract Year

PRA Disclosure Statement
According to the Paperwork Reduction Act of 1995, no persons are required to respond
to a collection of information unless it displays a valid OMB control number. The valid
OMB control number for this information collection is TBD. The time required to
complete this information collection is estimated to average 7.2 hours per response,
including the time to review instructions, search existing data resources, gather the data
needed, and complete and review the information collection. If you have comments
concerning the accuracy of the time estimate(s) or suggestions for improving this form,
please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer,
Mail Stop C4-26-05, Baltimore, Maryland 21244-1850. Please do not send
applications, claims, payments, medical records or any documents containing
sensitive information to the PRA Reports Clearance Office. Please note that any
correspondence not pertaining to the information collection burden approved
under the associated OMB control number listed on this form will not be
reviewed, forwarded, or retained. If you have questions or concerns regarding
where to submit your documents, please contact 1-800-MEDICARE.
Expiration: TBD

GENERAL INFORMATION ............................................................................................. 5

1.1 Purpose of Solicitation ..................................................................................................... 5
1.2 Background ...................................................................................................................... 5
1.3 Schedule........................................................................................................................... 6
1.4 Summary of Application Approval, Part D Bid Review, and Contracting Processes .. 7
2 INSTRUCTIONS .............................................................................................................. 8
2.1 Overview........................................................................................................................... 8
2.2 Technical Assistance ....................................................................................................... 8
2.3 Health Plan Management System (HPMS) Data Entry ................................................. 8
2.4 Instructions and Format of Qualifications ....................................................................... 9
2.4.1 Instructions ............................................................................................................... 9
2.4.2 Applicant Seeking to Offer New Employer/Union-Only Group Waiver Plans
(EGWPs) .................................................................................................................11
2.4.3 Applicant Seeking to Offer New Employer/Union Direct Contract PDPs and
PFFS 12
2.4.4 Applicant Entity Same as Contracting Entity ........................................................12
2.4.5 Joint Enterprise as Applicant and Contracting Entity ........................................... 12
2.4.6 Essential Operations Tests ....................................................................................13
2.4.7 Automatic Enrollment of Full-benefit Dual Eligible Individuals ............................ 13
2.4.8 Withdrawal of a Part D Application ........................................................................13
2.4.9 Technical Support ..................................................................................................14
2.5 Bid and Formulary Submission Software Training.......................................................14
2.6 Pharmacy Access ..........................................................................................................14
2.6.1 Retail Pharmacy Access ........................................................................................14
2.6.2 Home Infusion Pharmacy Access .........................................................................16
2.6.3 Long-Term Care Pharmacy Access ......................................................................16
2.6.4 Indian Tribe and Tribal Organization, and Urban Indian Organization (I/T/U) ... 16
2.6.5 Waivers Related to Pharmacy Access ..................................................................16
2.7 Waivers Related to Attestations for MAPD and PDP EGWP and MAPD and PDP
Direct Contract Applicants (“800 Series Plans”) ..........................................................18
2.8 Waivers for MA-PD and Cost Plan Applicants .............................................................18

2.9 Standard Contract with MAPD and PDP Sponsors .....................................................19
2.10 Protection of Confidential Information ..........................................................................20
3 APPLICATION ...............................................................................................................20
3.1 Applicant Experience, Contracts, Licensure and Financial Stability .......................... 21
3.1.1 Management and Operations 42 CFR Part 423 Subpart K................................. 21
3.1.2 Licensure and Solvency 42 CFR Part 423, Subpart I .......................................... 34
3.1.3 Program Integrity 2 CFR part 376 and Compliance Program 42 CFR §
423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9 ......................... 35
3.1.4 HPMS Part D Contacts.........................................................................................36
3.2 Benefit Design ................................................................................................................37
3.2.1 Formulary/Pharmacy and Therapeutics (P&T) Committee Social Security Act
§186-D-4(b)(3)(G), 42 CFR §423.120(b), 42 CFR ............................................... 37
3.2.2 Utilization Management Standards 42 CFR §423.153(b); Prescription Drug
Benefit Manual, Chapter 6 and Chapter 7\ ...........................................................39
3.2.3 Quality Assurance and Patient Safety Social Security Act §1860D- 4(c)(3); 42
CFR §423.153(c); Prescription Drug Benefit Manual, Chapter 7........................ 40
3.2.4 Medication Therapy Management 42 CFR §423.153(d); Social Security Act §
1860D-4(c)(2); Prescription Drug Benefit Manual, Chapter 7; ............................ 40
3.2.5 Electronic Prescription Program and Health Information Technology Standards
42 CFR §423.159; Prescription Drug Benefit Manual, Chapter 7; P.L. 111-5
(2009); 41
3.2.6 Bids 42 CFR § 423.104, §423.265 and §423.272 ................................................. 42
3.3 Service Area/Regions 42 CFR §423.112; Prescription Drug Benefit Manual, Chapter
5 ......................................................................................................................................42
3.5 General Pharmacy Access 42 CFR §423.120(a); Prescription Drug Benefit Manual,
Chapter 5 ........................................................................................................................43
3.6 Retail Pharmacy 42 CFR §423.120(a); 42 CFR §423.859(c); Prescription Drug
Benefit Manual, Chapter 5 ............................................................................................45
3.7 Out of Network Access 42 CFR §423.124; Prescription Drug Benefit Manual,
Chapter 5 ........................................................................................................................47
3.9 Home Infusion Pharmacy 42 CFR §423.120(a)(4); Prescription Drug Benefit Manual,
Chapter 5 ........................................................................................................................48
3.10 Long -Term Care (LTC) Pharmacy 42 CFR §423.120(a)(5); Prescription Drug Benefit
Manual, Chapter 5 .........................................................................................................48
3.11 Indian Health Service, Indian Tribe and Tribal Organization, and Urban Indian
Organization (I/T/U) Pharmacy 42 CFR .......................................................................50

3.19 Medicare Secondary Payer 42 CFR §423.462; Prescription Drug Benefit Manual,
Chapter 14 ......................................................................................................................55
5 APPENDICES ................................................................................................................63
APPENDIX I – Summary of Medicare Part D Regulatory Requirements Fulfilled under
Part C for Medicare Advantage Prescription Drug (MA-PD) Applicants .................... 64
APPENDIX II – Summary of PDP Application Requirements Fulfilled under Part C for
Cost Plan Prescription Drug Applicants .......................................................................67
APPENDIX III – Attestation for Employer/Union-Only Group Waiver Plans (800- Series)
........................................................................................................................................68
APPENDIX IV – Employer Direct Contract MA-PD Attestations ........................................ 73
APPENDIX V – Employer Direct Contract PDP Attestation ............................................... 76
APPENDIX VI – Part D Financial Solvency & Capital Adequacy Documentation ............ 80
APPENDIX VII – Federal Waiver of State Licensure ..........................................................88
APPENDIX VIII – Financial Solvency Documentation for Applicant Not Licensed as a
Risk-bearing Entity in Any State ...................................................................................96
APPENDIX IX – Organization Background and Structure................................................108
APPENDIX X – Crosswalks of Section 3.1.1E Requirements in Subcontracts submitted
as Attachments to Section 3.1.1 .................................................................................110
APPENDIX XI – Crosswalk for Retail Pharmacy Access Contracts ................................113
APPENDIX XII – Crosswalk for Mail Order Pharmacy Access Contracts .......................116
APPENDIX XIII – Crosswalk for Home Infusion Pharmacy Access Contracts ...............119
APPENDIX XIV – Crosswalk for Long-Term Care Pharmacy Access Contracts ...........122
APPENDIX XV – Crosswalk for Indian Tribe and Tribal Organization, and Urban Indian
Organization (I/T/U) Pharmacy Access Contracts .....................................................125
APPENDIX XVI – Applicant Submission of P&T Committee Member List and Certification
Statement .....................................................................................................................129
APPENDIX XVII – I/T/U Contract Addendum....................................................................134
APPENDIX XVIII – Compliance Program Crosswalk .......................................................142

1 GENERAL INFORMATION
1.1 Purpose of Solicitation
The Centers for Medicare & Medicaid Services is seeking applications from qualified
entities to enter into contracts to offer prescription drug coverage and to expand the
service areas of existing contracts offering prescription drug coverage as described in
the Medicare Prescription Drug Benefit Final Rule published in the Federal Register on
January 28, 2005 (70 Fed. Reg. 4194). This application must be used for all
organizations seeking new Prescription Drug Plan (PDP) and Medicare AdvantagePrescription Drug Plan (MA-PD) contracts, seeking to expand the service area of
existing contracts, and seeking to add prescription drug coverage. Please submit your
applications according to the process described in Section 2.0.

1.2 Background
The Medicare Prescription Drug Benefit program was established by section 101 of the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), as
amended, and is codified in sections 1860D-1 through 1860D-43 of the Social Security
Act (the Act).
Applicants who offer either a PDP or MA-PD plan may offer national plans (with
coverage in every region) or regional plans. MA-PD plan applicants may also offer local
plans. CMS has identified 26 MA Regions and 34 PDP Regions; in addition, each
territory is its own PDP region. Additional information about the regions can be found on
the www.cms.gov website.
It is important to note that Medicare Advantage (MA) organizations offering coordinated
care plans must qualify to offer at least one plan that includes both Part C and Part D
drug benefits throughout the organization‘s approved Part C service area. Similarly, MA
organizations offering a preferred provider organization (PPO) plan must offer Part D
coverage throughout the PPO regions in which they are approved to offer a Part C plan.
However, MA organizations offering private fee-for-service plans may, but are not
required to, offer a Part D drug benefit.
Medicare Cost Plans offered under section 1876(h) of the Act may, at their election,
offer prescription drug coverage as a supplemental benefit.
Part D sponsors and MA organizations have flexibility in terms of benefit design. This
flexibility includes, but is not limited to, authority to establish a formulary that designates
specific drugs that will be available within each therapeutic class of drugs, and the
ability to have a cost-sharing structure other than the statutorily defined structure
(subject to certain actuarial tests). The plans also may include supplemental benefits
coverage such that the total value of the coverage exceeds the value of basic
prescription drug coverage.

1.3 Schedule
2023 Milestones
Date

Milestone

November 11, 2022

Recommended date by which applicants should submit their
Notice of Intent to Apply Form to CMS to ensure access to
Health Plan Management System (HPMS) by the date
applications are released

December 2, 2022

CMS User ID form due to CMS

January 11, 2023

Release of the 2024 MA, Part D, and SNP
Applications

January 20, 2023

Deadline for NOIA form submission to CMS

February 15, 2023

2024 Applications due

February 2023

CMS releases guidance concerning updates to Parent
Organization designations in HPMS

March 2023

Parent Organization Update requests from sponsors due to
CMS (instructional memo to be released in February 2023)

April 2023

Plan Creation module, Plan Benefit Package (PBP), and Bid
Pricing Tool (BPT) available on HPMS

April 2023

Release of the 2024 Medication Therapy Management (MTM)
Program Submission Module in HPMS

May 2023

Medication Therapy Management (MTM) Program
submissions due

May 2023

•
•

Health Plan Management System (HPMS) formulary
submission window
Transition Policy Attestations and Policy due to CMS

May 2023

CMS sends Part D contract eligibility determination to
Applicants, based on review of application. Applicant’s bids
must still be negotiated. (see below)

June 5, 2023

All bids due

Early August 2023

CMS publishes national average Part D premium
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Date

Milestone

Late August 2023

CMS completes review and approval of bid data.

September 1, 2023

CMS executes Part D contracts with those organizations who
submit an acceptable bid

October 15, 2023

2024 Annual Coordinated Election Period begins

NOTE: CMS reserves the right to revise the Medicare Prescription Drug Benefit
program implementation schedule, including the solicitation and bidding process
timelines. This timeline does not represent an all-inclusive list of key dates related to the
Medicare Prescription Drug Benefit program. CMS reserves the right to amend or
cancel this solicitation at any time.

1.4 Summary of Application Approval, Part D Bid Review, and
Contracting Processes
There are three distinct phases to the overall review to determine whether CMS will
enter into a contract with an applicant.
The first phase is the application review process. CMS will review all applications
submitted on or by February 15, 2023 to determine whether the applicant meets the
qualifications we have established to enter into a Part D contract.
The second phase has two steps – the formulary upload and bid upload, which both
begin in May 2023. The formulary review entails determining that the proposed
formulary (if one is used):
•

Has at least two drugs in every therapeutic category and class (unless special
circumstances exist that would allow only one drug);

•

Does not substantially discourage enrollment by certain types of Part D eligible
individuals;

•

Includes adequate coverage of the types of drugs most commonly needed by Part D
enrollees;

•

Includes all drugs in certain classes and categories as established by the Secretary;
and

•

Includes an appropriate transition policy, which is inclusive of an Implementation
Statement and that addresses each Transition Attestation.

CMS will contact applicants if any issues are identified during the formulary review to
provide an opportunity for applicants to make any necessary corrections prior to the
Part D bid submission date. The second step involves the bid review and negotiations
with applicants to ensure that valuations of the proposed benefits are reasonable and
actuarially equivalent.
The third phase is contracting. Applicants judged qualified to enter into a Part D contract
or addendum as a result of successfully completing phase one and two will be offered a
Part D contract, or addendum to their Medicare managed care contract, by CMS.
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2 INSTRUCTIONS
2.1 Overview
There are six types of entities with which CMS contracts to offer the Medicare
prescription drug benefit: PDP sponsors, Medicare Advantage organizations that offer
MA-PDs (including local HMO plans, local PPOs, regional PPOs, and Private Fee-forService plans); organizations with Cost Plans under section 1876(h) of the Act,
Employer Groups (both Employer Group Waiver Plans (EGWPs), and Employer Direct),
and PACE organizations. This application is for any organization seeking to offer a new
PDP or MAPD, and for any organization seeking to expand or add coverage to an
existing MAPD, PDP, or Cost Plan contract, including EGWP and Employer Direct
contracts. There is a separate application and separate application process for PACE
organizations.

2.2 Technical Assistance
For technical assistance in the completion of this Application, contact:
[email protected]
As stated in section 2.4.1, Applicants must contact the HPMS Help Desk if they are
experiencing technical difficulties uploading or completing any part of this solicitation
within HPMS prior to the submission deadline. Applicants requesting technical
assistance with uploading or completing any part of the online HPMS application after
the published CMS application deadline will not be granted technical assistance, nor the
opportunity to complete their application submission.

2.3

Health Plan Management System (HPMS) Data Entry

Organizations that submit a Notice of Intent to Apply form for an initial application are
assigned a pending contract identifier (contract ID) with a prefix of either E-, H-, R-, or
S-, followed by four digits. The contract ID is used throughout the application and
subsequent operational processes. Applicants seeking to add or expand coverage
under an existing contract use the associated contract ID.
Once CMS assigns a contract ID, and applicants apply for, and receive, their CMS User
ID(s) and password(s) for HPMS access, applicants must input contact and other
related information into HPMS (see section 3.1.4). Applicants must ensure prompt entry
and ongoing maintenance of data in HPMS. By keeping the information in HPMS
current, applicants facilitate the tracking of their applications throughout the review
process and ensure that CMS has the most current information for providing application
status updates, guidance, and other correspondence.
If an applicant is awarded a contract, CMS uses this information for frequent
communications during implementation and throughout the contract year. It is important
that the information in HPMS remain accurate at all times. It is also important that
organizations consult the HPMS User Manuals contained in HPMS to ensure that they
are using the system properly.

2.4 Instructions and Format of Qualifications
Applications must be submitted by February 15, 2023. Applicants must use the 2024
solicitation. CMS will not accept or review any submissions using a prior version of the
solicitation, including the use of CMS provided templates from prior years (e.g. 2023
and earlier). Applicants should not rely on their understanding of prior years’
applications and review standards in determining whether they are complying
with application requirements. If they are uncertain about how to interpret
application instructions and requirements, they should ask CMS for guidance.

2.4.1 Instructions
Applicants must complete the entire solicitation, consistent with the instructions
provided throughout the document. Applicants must complete the entire solicitation
via HPMS. CMS will not accept any information in hard copy. If an applicant
submits the information via hard copy, the application will not be considered
received.
CMS will communicate with all applicants via email. The email notifications will be
generated through HPMS, so organizations must ensure that the applicant’s Part D
contact information provided through the “Notice of Intent to Apply” process is current
and correct, and that there are no firewalls in place that would prevent an email from the
[email protected] web address from being delivered.
Upon completion of the HPMS online application, organizations are required to
click ‘Final Submit,’ which time and date stamps the completion of the
application. No additional work on the application may be done after the applicant
clicks ‘Final Submit.’ Organizations will receive a confirmation number from HPMS upon
clicking ‘Final Submit.’ Failure to obtain a confirmation number indicates that the
applicant failed to properly submit its Part D application by the CMS-established
deadline. Any entity that experiences technical difficulties during the submission
process must contact the HPMS Help Desk prior to the submission deadline, and
CMS will make case by case determinations where appropriate regarding the timeliness
of the application submission.
2.4.1.1 Completion of Attestations
In preparing your application in response to the attestations in Section 3 of this
solicitation, please mark “Yes” or “No” or “Not Applicable” in HPMS.
In many instances, applicants are directed to affirm within HPMS that they meet
particular requirements by indicating “Yes” next to a statement of a particular Part D
program requirement. By providing such attestation, an applicant confirms that its
organization complies with the relevant requirements as of the date its application is
submitted to CMS, unless a different date is stated by CMS.
2.4.1.2 Application Review Standard
CMS will check the application for completeness after its receipt. Consistent with the
rulemaking conducted in April 2011, CMS does not “review applications that are
submitted after the established deadline.” 76 FR 21527 (April 15, 2011). CMS does not
consider an application to be submitted when the materials submitted by the deadline
are “so lacking in required information or correct detail as to fail to constitute a valid,
9

timely submission.” 76 FR 21527 (April 15, 2011). Some examples of invalid
submissions include but are not limited to the following:
•

Applicants that fail to upload executed agreements or contract templates;

•

Applicants that upload contract crosswalks only instead of contracts; or

•

Applicants that fail to upload any pharmacy network lists.

CMS will notify any organizations that are determined to have provided
invalid submissions that they failed to meet the application deadline.
In accordance with 42 CFR §423.502 and 503, applicants must demonstrate that they
meet all (not “substantially all”) Part D program requirements to qualify as a Part D
sponsor in their proposed service area.
2.4.1.3 Application Review Process and Cure Periods
For those applicants with valid submissions, CMS will notify your organization via email
of any deficiencies and afford a courtesy opportunity to amend the application(s). The
application status emails are accessible in HPMS at the “Communications History” link
in Contract Management>Basic Contract Management> Submit Application Data. CMS
will only review the last submission provided during this courtesy cure period.
As with all aspects of a Part D sponsor’s operations under its contract with CMS, we
may verify a sponsor’s compliance with qualifications it attests it meets through on-site
visits at the Part D sponsor’s facilities and through other program monitoring
techniques. Failure to meet the requirements attested to in this solicitation and failure to
operate its Part D plan(s) consistent with the requirements of the applicable statutes,
regulations, call letter, guidance, and the Part D contract may delay a Part D sponsor’s
marketing and enrollment activities or, if corrections cannot be made in a timely manner,
the Part D sponsor will be disqualified from participation in the Part D program.
An individual with legal authority to bind the applicant must execute the certification
found in Section 4. CMS reserves the right to request clarifications or corrections to a
submitted application. Failure to provide requested clarifications within the time period
specified by CMS for responding could result in the applicant receiving a notice of intent
to deny the application.
Applicants failing to cure deficiencies following the courtesy cure period will be issued a
Notice of Intent to Deny the application. Applicants receiving notices of intent to deny
have 10 days to remedy their applications. The end of the 10-day period is the last
opportunity an applicant has to provide CMS with clarifications or corrections. CMS will
only review the last submission provided during this cure period. Application materials
will not be accepted after this 10-day time period.
This solicitation does not commit CMS to pay any cost for the preparation and
submission of an application.
If a subsidiary, parent, or otherwise related organization is also applying to offer Part D
benefits, these entities MUST submit separate applications. Entities intending to have
both local MA-PD and Regional PPO contracts must submit separate MA-PD
applications.
10

2.4.2 Applicant Seeking to Offer New Employer/Union-Only Group Waiver
Plans (EGWPs)
All new Part D applicants seeking to offer new “800 series” EGWPs – with or without
corresponding individual plans, including applicants that have not previously applied to
offer plans to individual beneficiaries or “800 series” EGWPs – must complete the
appropriate EGWP attestation. PDP applicants should complete the attestation in
Appendix III. MA-PD applications should complete the attestation found in the 2019
Application Instructions for MA Organizations to Offer New Employer/Union-Only
Group Waiver Plans (for MAPD applicants). The Appendix provides the Applicant with
the ability to choose between only offering “800 series” plans and participating in both
the individual and group markets. The attestation provided in Appendix III specifies
those individual market requirements that are not applicable in the employer market.
2.4.2.1 PDP EGWP Service Area
New PDP applicants and existing PDP Sponsors will be able to enter their EGWP
service areas directly into HPMS during the application process (refer to HPMS User
Guide). PDP applicants may provide coverage to employer group members wherever
they reside (i.e., nationwide). However, in order to provide coverage to retirees
wherever they reside, PDP applicants must set their EGWP service area to include all
areas where retirees reside during the plan year (i.e., set national service areas).
SAE of Employer-only service area
Applicants with existing contracts seeking to add EGWP for the first time, or expand
only the EGWP service area, will complete an abbreviated application consisting of
attestations, and application certifications.
2.4.2.2 Applicants Seeking to Offer New Individual and “800 Series” Plans
– Pharmacy Access
Applicants seeking to offer both individual and “800 series” plans are not required to
submit separate pharmacy access lists (retail, mail order, home infusion, long-term
care, I/T/U) for their “800 series” service areas in addition to those required to be
submitted for their individual plan service areas. Sponsors will not initially be required to
have retail and other pharmacy networks in place for those designated EGWP service
areas outside of their individual plan service areas. However, in accordance with
employer group waiver pharmacy access policy, pharmacy access sufficient to meet the
needs of enrollees must be in place once the sponsor enrolls members of an employer
or union group residing in particular geographic locations outside of its individual plan
service area.
2.4.2.3 Applicants Seeking to Offer Only New “800 Series” Plans –
Pharmacy Access
Applicants applying to only offer “800 series” plans (i.e., no plans will be offered to
individual Medicare beneficiaries under this contract number) must submit retail and
other pharmacy access lists (mail order, home infusion, long-term care, I/T/U) for the
entire defined EGWP service area during the application process and demonstrate
sufficient access in these areas in accordance with employer group waiver pharmacy
11

access policy.

2.4.3 Applicant Seeking to Offer New Employer/Union Direct Contract PDPs
and PFFS
New Employer/Union Direct Contract applicants must enter their service area directly
into HPMS during the application process.
In general, Part D sponsors can only cover beneficiaries in the service areas in which
they are licensed and approved by CMS to offer benefits. CMS has waived these
requirements for Direct Contract sponsors. Direct Contract sponsors can extend
coverage to all of their retirees, regardless of where in the nation they reside. In order
to provide coverage to retirees wherever they reside, Direct Contract applicants must
set their service areas to include all areas where retirees may reside during the plan
year.
Direct Contract applicants are required to submit retail and other pharmacy access
information for the entire defined service area during the application process and
demonstrate sufficient access in these areas in accordance with employer group waiver
pharmacy access policy.
Those employers or unions seeking to directly contract with CMS to become sponsors
for their Medicare-eligible retirees must complete the following materials:
•

The 2022 Medicare Advantage Application (for Direct Contract PFFS applicants
ONLY)

•

The 2022 Solicitation for Applications for Prescription Drug Plan Sponsors

•

Appendix IV – Direct Contract MA-PD Attestations

•

Appendix V—Direct Contract PDP Attestation

•

Appendix VI -- Part D Financial Solvency & Capital Adequacy Documentation for
Direct Contract PDP Sponsor Applicants

2.4.4

Applicant Entity Same as Contracting Entity

The legal entity that submits this application must be the same entity with which CMS
enters into a Part D contract, or in the case of an MA-PD and Cost Plan sponsor, the
same legal entity seeking an addendum to an MA or Cost Plan contract.

2.4.5

Joint Enterprise as Applicant and Contracting Entity

CMS will recognize as applicants those joint enterprises formed by agreement among
multiple state-licensed organizations (or organizations that have applied to CMS for a
licensure waiver) for the purpose of administering a stand-alone PDP or an MA
Regional PPO (RPPO) in at least one entire PDP region. Each member of the joint
enterprise will be contractually liable to CMS for the administration of the Part D benefit
in the State(s) in which it is licensed or for which it has received a CMS licensure
waiver.
The joint enterprise need submit only one application on behalf of the enterprise’s
member organizations and such application shall represent the joint enterprise’s
commitment to offering a uniform benefit in each PDP region in which it will offer Part D
12

benefits. However, the information requested in Section 3.1 of this solicitation must be
provided for each member of the joint enterprise with separate accompanying
Appendices as necessary. For example, each joint enterprise member must provide
identifying information about its organization, copies of its executed contracts with
entities performing critical tasks related to the delivery of the Part D benefit, and
information related to its business integrity. The responses provided in the remainder of
the application may be made once by the joint enterprise applicant and will be
considered binding on each member of the joint enterprise. Also, a separate
certification statement, shown in Section 4.0, must be provided for each joint enterprise
member organization. Each certification statement must be signed by an individual
specifically granted the authority to bind the member organization.
Joint enterprise applicants are required to submit to CMS for approval a copy of the
executed agreement among the joint enterprise member organizations. Please see
Section 3.1.1.G, for instructions concerning this requirement.
Upon CMS’ determination that the members of the joint enterprise are qualified to enter
into a contract and approval of the bid(s) submitted by the joint enterprise, CMS will
enter into a multiple-party contract signed by authorized representatives of CMS and
each member of the joint enterprise.

2.4.6 Essential Operations Tests
Applicants new to the Part D program may be subject to an essential operations test
prior to the start of the plan year, as provided in 42 CFR §423.504(b)(10). The test is
designed to evaluate whether a sponsor is prepared to administer the Part D benefit,
including claims processing, formulary administration, appeals and grievances, and
other key functions. CMS may decline to enter into a contract with a sponsor that fails to
pass the essential operations test.

2.4.7 Automatic Enrollment of Full-benefit Dual Eligible Individuals
When there is more than one PDP in a region with a premium that makes it eligible for
automatic enrollment of full-benefit dual eligible individuals (as provided in 42 CFR
§423.34(d)), CMS enrolls beneficiaries into the eligible PDPs on a random basis. For
this purpose, CMS counts the Applicant and its parent and affiliates as a single PDP,
regardless of how many of those entities have bids that are at or below the low income
subsidy threshold.

2.4.8 Withdrawal of a Part D Application
In those instances where an organization seeks to withdraw its application or reduce the
service area of a pending application prior to the execution of a Part D contract, then the
organization must send an official notice to CMS. The notice should be on organization
letterhead, clearly identify the pending application number and service area (as
appropriate), and be signed by the Chief Executive Officer (CEO) of the organization.
The notice should be delivered via email to [email protected]. The
subject line of the email should read “Pending application withdrawal or reduction to

pending service area.” The withdrawal will be considered effective as of the date of the
email.

2.4.9 Technical Support
CMS conducts technical support calls, also known as user group calls, for applicants
and existing Part D sponsors. CMS operational experts (e.g., from areas such as
enrollment, information systems, marketing, bidding, formulary design, and coordination
of benefits) are available to discuss and answer questions regarding the agenda items
for each meeting. Registration for the technical support calls and to join the list serve to
get updates on CMS guidance can be found at www.mscginc.com/Registration/.
CMS also conducts special training sessions, including a user group call dedicated to
addressing issues unique to sponsors that are new to the Part D program.
CMS provides two user manuals to assist applicants with the technical requirements of
submitting the Part D application through the Health Plan Management System
(HPMS). The Basic Contract Management User’s Manual provides information on
completing and maintaining basic information required in Contract Management. These
data must be completed prior to the final submission of any application. The Online
Application User’s Manual provides detailed instructions on completing the various
online applications. Both manuals can be found in HPMS by clicking on Contract
Management>Basic Contract Management>Documentation.

2.5 Bid and Formulary Submission Software Training
CMS will provide technical instructions and guidance upon release of the HPMS
formulary and bid functionality as well as the Plan Benefit Package (PBP) and Bid
Pricing Tool (BPT) software. In addition, systems training will be available at the Bid
Training in April 2021.

2.6 Pharmacy Access
An integral component of this Solicitation concerns the pharmacy access standards
established under section 1860D-4(b)(1)(C) of the Act. The standards require in part
that each sponsor secure the participation in their pharmacy networks of a sufficient
number of pharmacies to dispense drugs directly to patients (other than by mail order)
to ensure convenient access to covered Part D drugs by Part D plan enrollees.
Furthermore, Part D sponsors must provide adequate access to home infusion and
convenient access to long-term care, and Indian Health Service, Indian Tribe and Tribal
Organization, and Urban Indian Organization (I/T/U) pharmacies in accordance with 42
CFR § 423.120 and related CMS instructions and guidance.

2.6.1 Retail Pharmacy Access
Applicants must ensure that their retail pharmacy network meets the criteria established
under 42 CFR §423.120(a)(1). CMS rules require that applicants establish retail
pharmacy networks in which:

•

In urban areas, at least 90 percent of Medicare beneficiaries in the applicant’s
service area, on average, live within 2 miles of a retail pharmacy participating in the
applicant’s network;

•

In suburban areas, at least 90 percent of Medicare beneficiaries in the applicant’s
service area, on average, live within 5 miles of a retail pharmacy participating in the
applicant’s network; and

•

In rural areas, at least 70 percent of Medicare beneficiaries in the applicant’s service
area, on average, live within 15 miles of a retail pharmacy participating in the
applicant’s network.

Applicants may count I/T/U pharmacies and pharmacies operated by Federally Qualified
Health Centers and Rural Health Centers towards the standards of convenient access
to retail pharmacy networks.
Applicants may use their contracted pharmacy benefit manager’s (PBM) existing 2023
Part D network to demonstrate compliance with retail pharmacy access standards. If an
applicant is creating a new Part D network, the submission must be based on executed
contracts for year 2024. If the applicant retail pharmacy network is segmented (i.e., the
applicant has developed multiple networks for use in the same service area), the
applicant must submit the most restrictive (or, least accessible) network based on its
executed contracts for 2024.
CMS conducts the review of retail pharmacy access based on the service area that the
applicant has provided in HPMS by the application deadline. The access review is
automated. Applicants must input their pending service area into HPMS per the
instructions at section 3.3. As explained in section 3.6.B, applicants must upload the
retail pharmacy list in HPMS. Based on the information provided by the applicant and
the Medicare Beneficiary Count file available on the CMS application guidance website,
CMS will generate access percentages for all applicants.
With limited exceptions, this information gathered from the pharmacy lists will be used
by CMS to geo-code the specific street-level locations of the pharmacies to precisely
determine retail pharmacy access. Exceptions to this process may include, but not be
limited to, those instances where a street-level address cannot be precisely geo-coded.
In those situations, CMS will utilize the ZIP code-level address information to geo-code
the approximate pharmacy location.
The retail pharmacy lists may contain contracted pharmacies that are outside of the
applicant’s pending service area (to account for applicants who contract for a national
pharmacy network); however, CMS will only evaluate retail pharmacy access for the
pending service area.
While applicants are required to demonstrate that they meet the Part D pharmacy
access requirements at the time this application is submitted to CMS, CMS expects that
pharmacy network contracting will be ongoing in order to maintain compliance with our
retail pharmacy access requirements.

2.6.2 Home Infusion Pharmacy Access
Applicants must demonstrate that their contracted pharmacy network provides adequate
access to home infusion pharmacies in accordance with 423 CFR §423.120(a)(4). In
order to demonstrate adequate access to home infusion pharmacies, Applicants must
provide a list of all contracted home infusion pharmacies (see section 3.9). CMS uses
this pharmacy listing to compare applicants’ home infusion pharmacy network against
existing Part D sponsors in the same service areas to ensure that applicants have
contracted with an adequate number of home infusion pharmacies. The adequate
number of home infusion pharmacies was developed based on data provided by all Part
D sponsors through the annual Part D Reporting Requirements. A reference file entitled
“Adequate Access to Home Infusion Pharmacies” is provided on the CMS website,
http://www.cms.gov/Medicare/Prescription-DrugCoverage/PrescriptionDrugCovContra/RxContracting_ApplicationGuidance.html.

2.6.3 Long-Term Care Pharmacy Access
Applicants must demonstrate that their contracted pharmacy network provides
convenient access to long-term care (LTC) pharmacies in accordance with 42 CFR
423.120(a)(5). In order to demonstrate convenient access to long-term care
pharmacies, applicants must provide a list of all contracted long-term care pharmacies
(see section 3.10). CMS uses this pharmacy listing, as well as information reported as
part of applicants’ reporting requirements and complaints data, to evaluate initial and
ongoing compliance with the convenient access standard. Applicants wishing to
access a list of LTC Facilities to assist in preparing their LTC pharmacy network can
refer to the Survey and Certification Quality, Certification & Oversight Reports website
at https://qcor.cms.gov/main.jsp#.

2.6.4 Indian Tribe and Tribal Organization, and Urban Indian Organization
(I/T/U)
Applicants must demonstrate that they have offered standard contracts to all I/T/U
pharmacies residing within the applicants’ service areas in accordance with 42 CFR
§423.120(a)(6). In order to demonstrate convenient access to I/T/U pharmacies,
applicants must provide a list of all I/T/U pharmacies to which they have offered
contracts (see section 3.11). CMS provides the current national list of all I/T/U
pharmacies to assist applicants in identifying the states in which I/T/U pharmacies
reside. The in the ITU Pharmacies Reference File is located on the CMS website,
http://www.cms.gov/Medicare/Prescription-DrugCoverage/PrescriptionDrugCovContra/RxContracting_ApplicationGuidance.html.

2.6.5 Waivers Related to Pharmacy Access
2.6.5.1 Waivers for Plans in the Territories (excluding Puerto Rico)
To ensure access to coverage in the territories, section 1860D-42(a) of the Act grants
CMS the authority to waive the necessary requirements to secure access to qualified
prescription drug coverage for Part D eligible individuals residing in the territories. The
regulations at 42 CFR §423.859(c) allow CMS to waive or modify the requirement for
access to coverage in the territories either at an applicant’s request or at CMS’ own
16

determination. Under that authority, CMS will consider waiving the convenient access
requirements for a plan’s Part D contracted retail pharmacy network, found in 42 CFR
§423.120(a)(1) for the Territories, if an applicant requests such a waiver, and
demonstrates that it has made a good faith effort to meet the requirements described in
Section 3.6 D of this solicitation.
2.6.5.2 Waivers for MAPD Plans
CMS guidance regarding waivers of the pharmacy access and any willing pharmacy
requirements for certain MA-PD sponsors is contained at sections 50.7 and 50.8.1 of
Chapter 5 of the Prescription Drug Benefit Manual. These waivers are described below.
Waiver of Retail Convenient Access Standards for MA-PDs
As described in section 50.7.1 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer their Part D plan benefit through a
contracted retail pharmacy network that meets CMS convenient access standards is
waived for MA-PD sponsors that operate their own pharmacies. MA-PD sponsors must
demonstrate at the plan level that a majority (50%) of the prescriptions are filled at retail
pharmacies owned and operated by the organization in order to be granted the waiver.
(See section 3.6F)
Waiver of Convenient Access Standards for MA-PFFS
As described in section 50.7.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer Part D plan benefits through a contracted
pharmacy network that meets CMS convenient access standards is waived for MAPFFS plans that meet the criteria in table 3.4. (See section 3.6.F)
Waiver of Any Willing Pharmacy Requirements for MA-PD
As described in section 50.8.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that MA-PD sponsors must offer a network pharmacy contract to any willing
pharmacy that agrees to accept MA-PD sponsor’s standard terms and conditions is
waived for MA-PD sponsors that own and operate the pharmacies in their network. MAPD sponsors must demonstrate at the plan level that at least 98% of prescriptions are
filled through pharmacies that are owned and operated by plan sponsor in order to be
granted the waiver. (See section 3.6G)
2.6.5.3 Waivers for Cost Plans
CMS guidance regarding waivers of the pharmacy access and any willing pharmacy
requirements for certain Cost Plan sponsors is contained at sections 50.7 and 50.8.1 of
Chapter 5 of the Prescription Drug Benefit Manual. These waivers are described below.
Waiver of Retail Convenient Access Standards
As described in section 50.7.1 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that Applicants must offer their Part D plan benefit through a contracted
retail pharmacy network that meets CMS convenient access standards is waived for
Applicants that operate their own pharmacies. Applicants must demonstrate at the plan

level that a majority (50%) of the prescriptions are filled at retail pharmacies owned and
operated by the organization in order to be granted the waiver.
Waiver of Any Willing Pharmacy Requirements
As described in section 50.8.2 of Chapter 5 of the Prescription Drug Benefit Manual, the
requirement that Applicants must offer a network pharmacy contract to any willing
pharmacy that agrees to accept Applicant’s standard terms and conditions is waived for
Applicants that own and operate the pharmacies in their network. Applicants must
demonstrate at the plan level that at least 98% of prescriptions are filled through
pharmacies that are owned and operated by plan sponsor in order to be granted the
waiver. (See Sections 3.6 F & G)

2.7 Waivers Related to Attestations for MAPD and PDP EGWP and
MAPD and PDP Direct Contract Applicants (“800 Series Plans”)
As a part of the application process, those organizations seeking to offer 800 series
plans may submit individual waiver/modification requests to CMS. Applicants should
submit an attachment via an upload in the HPMS Part D Attestations section that
addresses the following:
•

Specific provisions of existing statutory, regulatory, and/or CMS policy
requirement(s) the applicant is requesting to be waived or modified (e.g., 42 CFR
§423.32, Section 30.4 of the Part D Enrollment Manual);

•

How the particular requirement(s) hinder the design of, the offering of, or the
enrollment in, the employer-sponsored group plan;

•

Detailed description of the waiver/modification requested including how the
waiver/modification will remedy the impediment to the design of, the offering of, or
the enrollment in, the employer-sponsored group prescription drug plan;

•

Other details specific to the particular waiver/modification that would assist CMS in
the evaluation of the request; and

•

Contact information (contract number, name, position, phone, fax and email
address) of the person who is available to answer inquiries about the
waiver/modification request.

Note: Applicants should review the waivers currently approved by CMS in Chapter 12
of the Medicare Prescription Drug Benefit Manual to assess whether the sponsoring
organization is similarly situated to qualify for an existing waiver prior to submitting a
request to CMS.

2.8 Waivers for MA-PD and Cost Plan Applicants
CMS is authorized to grant waivers of Part D program requirements where requirements
conflict with or duplicate a Part C or Cost Plan requirement, or where granting a waiver
would improve the MA-PD or Cost Plan sponsor’s coordination of Part C and Part D
benefits. Accordingly, CMS has identified the waivers it is granting to all MA-PD
sponsors in the chart shown in Appendix I Summary of Medicare Part D Regulatory
Requirements Fulfilled under Part C for Medicare Advantage Prescription Drug (MA-PD)
18

Applicants. As a result of these CMS-granted waivers, the MA-PD sponsor application
is less comprehensive than the PDP sponsor application. These waivers will be
reflected in each MA-PD sponsor’s Part D addendum.
Applicant Requests for Additional Waivers: CMS may grant additional waivers upon an
MA-PD or Cost Plan sponsor’s request. Any waiver granted by CMS will apply to all
similarly situated MA-PD sponsors.
For each waiver request, the applicant must provide, as an upload in HPMS, a
statement that includes:
1. The Part D regulation reference.
2. The appropriate waiver criteria (e.g., duplicative, conflicts, improves benefit
coordination).
3. A discussion of how the requested waiver meets at least one of the three waiver
criteria.
CMS will notify applicants whether their requests were approved via a CMS web posting
of all approved waivers.
Where this application directs the applicant to attest that it will meet a particular Part D
requirement for which the applicant has requested a waiver, the applicant should check
both the “Yes” box and the “Waiver Requested” box within HPMS. In the event that
CMS does not approve a particular waiver, the applicant will still have attested that it will
meet all the applicable Part D program requirements and remain eligible to enter into a
Part D addendum upon approval of its bids. This process will prevent applicants from
having to submit additional application responses after the original February deadline.
If, as a result of CMS’ denial of its waiver request, the applicant no longer intends to
offer a Part D benefit plan, the applicant must notify CMS in writing on or before June
29, 2021. CMS will not execute a Part D addendum with applicants that submit such a
notice. This notice of withdrawal should be sent following email instructions in section
2.4.7 Withdrawal of Part D Applications. No hard copies will be accepted.

2.9 Standard Contract with MAPD and PDP Sponsors
Successful applicants will be deemed qualified to enter into a Part D contract with CMS
to operate one or more Medicare prescription drug plans after CMS has reviewed the
Applicant’s entire submission. Only after the qualified applicant and CMS have reached
agreement on the applicant’s bid submissions will the applicant be asked to execute its
Part D contract.
Approved Part D applications are valid for the forthcoming contract year. Should an
applicant decide to not execute a contract after receiving application approval, the
applicant will be required to reapply in a subsequent year if it desires to enter a Part D
contract in the future.

2.10 Protection of Confidential Information
Applicants may seek to protect their information from disclosure under the Freedom of
Information Act (FOIA) by claiming that FOIA Exemption 4 applies. The applicant is
required to label the information in question “confidential” or “proprietary”, and explain
the applicability of the FOIA exemption it is claiming. This designation must be in
writing.
When there is a request for information that is designated by the applicant as
confidential or that could reasonably be considered exempt under Exemption 4, CMS is
required by its FOIA regulation at 45 CFR §5.65(d) and by Executive Order 12,600 to
give the submitter notice before the information is disclosed. To decide whether the
applicant’s information is protected by Exemption 4, CMS must determine whether the
applicant has shown that
•

Disclosure of the information might impair the government's ability to obtain
necessary information in the future;

•

Disclosure of the information would cause substantial harm to the competitive
position of the submitter;

•

Disclosure would impair other government interests, such as program effectiveness
and compliance; or

•

Disclosure would impair other private interests, such as an interest in controlling
availability of intrinsically valuable records, which are sold in the market.

Consistent with our approach under the Medicare Advantage program, we would not
release information under the Medicare Part D program that would be considered
proprietary in nature.

3 APPLICATION
Nothing in this application is intended to supersede the regulations at 42 CFR Part 423,
42 CFR Part 422, the Prescription Drug Benefit Manual, the Medicare Managed Care
Manual, or any other CMS guidance or instructions related to the operation of the Part D
program or the MA program. Failure to reference a regulatory requirement or CMS
instruction in this application does not affect the applicability of such requirement. In
particular, the attestations in this application are intended to highlight examples of key
requirements across a variety of functional and operational areas, but are in no way
intended to reflect a complete or thorough description of all Part D requirements.
For most of the Part D program requirements described in this solicitation, CMS has
issued operational policy guidance that provides more detailed instructions to Part D
sponsors. Organizations submitting an application in response to this solicitation
acknowledge that in making the attestations stated below, they are also representing to
CMS that they have reviewed and comply with the associated guidance materials
posted on the CMS web site. Applicants must visit the CMS web site periodically to
review new or revised guidance documents.
All uploads and templates will be accessed in HPMS through the HPMS Contract
Management Module. Applicants should refer to the Contract Management – Online
20

Application User’s Guide Version 2.0 for further instructions.

3.1 Applicant Experience, Contracts, Licensure and Financial
Stability
SPECIAL INSTRUCTIONS FOR JOINT ENTERPRISE APPLICANTS: If an application
is being submitted by a joint enterprise, as described above in Section 2.4, a separate
set of responses to the requirements in Section 3.1 must be provided as part of this
application by each member organization of the joint enterprise. The responses should
be uploaded in the Part D contracting section of the application.

3.1.1 Management and Operations 42 CFR Part 423 Subpart K
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ or, if permitted,
“NA”, to each of the following
qualifications to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant is a non-governmental legal entity
that intends to enter into a Medicare
Prescription Drug Plan contract with CMS.
(For applicants applying for a new PDP
contract.)

Applicant is a legal entity that intends to enter
into a Medicare Prescription Drug Plan
addendum to its contract with CMS. (For
applicants applying for a new MAPD contract
or to add a Part D benefit to a Cost contract.)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

applicants applying for a new MAPD or
PDP contract or to add a Part D benefit to a
Cost contract.)

Applicant does not have any other related
entities offering a stand-alone Prescription
Drug Plan in the region or regions it is
applying for a new contract. (For applicants
applying for a new PDP contract.) 42 CFR
§423.503(a)(3)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Applicant must attest ‘yes’ or, if permitted,
“NA”, to each of the following
qualifications to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
If applicant, applicant’s parent organization,
or any subsidiaries of applicant’s parent
organization has an existing contract(s) with
CMS to provide Part D drug benefits at least
one of those contracts has been in
continuous effect since January 1, 2022 or
earlier. (If the Applicant, Applicant’s parent
organization, or a subsidiary of Applicant’s
parent organization does not have any
existing contracts with CMS to provide Part D
drug benefits, select “NA”.) (For all
applicants) 42 CFR § 423.503(b)(2)
The Applicant, its parent organization, a
subsidiary of its parent organization, or its
contracted first tier, downstream, or related
entities have, in combination, at least one full
year of experience within the past two years
performing each of the following functions:
-

Authorization, adjudication, and
processing of prescription drug claims
at the point of sale.

Administration and tracking of
enrollees’ drug benefits in real time,
including automated coordination of
benefits with other payers.

Operation of an enrollee appeals and
grievance process.

42 CFR §423.504(b)(8)
The Applicant, its parent organization, or a
subsidiary of its parent organization has, for
two continuous years immediately prior to
submission of this application, actively
offered health insurance or health benefits
coverage, including prescription drug
coverage, as a risk bearing entity in at least
one State. (Not applicable to MAPD or Cost
Plan applicants) 42 CFR §423.504(b)(9)
23

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Applicant must attest ‘yes’ or, if permitted,
“NA”, to each of the following
qualifications to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
The Applicant, its parent organization, or a
subsidiary of its parent organization has, for
five continuous years immediately prior to
submission of this application, actively
managed prescription drug benefits for an
organization that offers health insurance or
health benefits coverage. (Not applicable to
MAPD or Cost Plan applicants) 42 CFR
§423.504(b)(9)
Applicant has read, understood, and complies
with the regulations at 42 CFR Part 423
Subpart K and all CMS-issued guidance
related to management and operations. (Not
applicable for SAE applicants)
Applicant maintains contracts or other legal
arrangements between or among the entities
combined to meet the functions identified in
subsection 3.1.1C. (For all applicants) 42
CFR §423.505(i)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Applicant must attest ‘yes’ or, if permitted,
“NA”, to each of the following
qualifications to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant does not have any covered
persons who also served as covered
persons for an entity that nonrenewed a
contract pursuant to 42 CFR §423.507(a) or
(b), terminated by mutual consent, pursuant
to 42 CFR §423.508, or unilaterally,
pursuant to 42 CFR §423.510, since January
1, 2021.
“Covered persons”, as defined at 42 CFR §§
423.507(a)(4), 423.508(f), 423.510(e)(2),
include:
•
All owners of nonrenewed or
terminated organizations who are natural
persons, other than shareholders who have
an ownership interest of less than 5 percent;
•
An owner of a whole or part interest in
a mortgage, deed of trust, note, or other
obligation secured (in whole or in part) by
the organization, or by any property or
assets thereof, which whole or part interest
is equal to or exceeds 5 percent of the total
property and assets of the organization; and
•
A member of the board of directors or
board of trustees of the entity, if the
organization is organized as a corporation.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Applicant must attest ‘yes’ or, if permitted,
“NA”, to each of the following
qualifications to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant has not had a contract terminated
by CMS pursuant to 42 CFR § 423.509 since
January 1, 2020 and does not have any
covered persons who also served as
covered persons for an entity whose contract
was terminated by CMS pursuant to CFR §
423.509 since January 1, 2019. “Covered
persons”, as defined at 42 CFR §
423.503(b)(4) include:
•
All owners of nonrenewed or
terminated organizations who are natural
persons, other than shareholders who have
an ownership interest of less than 5 percent;
•
An owner of a whole or part interest in
a mortgage, deed of trust, note, or other
obligation secured (in whole or in part) by
the organization, or by any property or
assets thereof, which whole or part interest
is equal to or exceeds 5 percent of the total
property and assets of the organization; and
•
A member of the board of directors or
board of trustees of the entity, if the
organization is organized as a corporation.
(Not applicable for SAE applicants)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

B. Upload organizational background and structure information. Submit this
information by downloading the appropriate template found in HPMS that mimics
the Appendix entitled, Organization Background and Structure. Also upload into
HPMS proof of your organization’s incorporation, such as articles of
incorporation or a certificate of good standing from your state of incorporation.
You must demonstrate that your organization was incorporated and recognized
by the state of incorporation as of the date the application was due. (Not
applicable for SAE applicants)
C. First tier, Downstream and Related Entities Function Chart (Not applicable for
SAE applicants.)
A Part D sponsor may meet program requirements by delegating the performance of
certain required functions to entities with which it contracts directly, referred to in the
Part D regulations (§423.501) as “first tier entities.” These entities may in turn contract
with other entities, defined as “downstream entities,” for the performance of the
delegated function. A related entity is an entity that is a parent, subsidiary, or subsidiary
of the parent of the Part D Sponsor. A related entity may be either a first tier or
downstream entity.
Where an applicant has elected to use subcontractors to meet Part D requirements, it
must demonstrate that it has binding contracts in place that reflect these relationships.
These contracts serve as the legal links that form the applicant’s “chain of delegation,”
extending from the applicant to the entities (first tier or downstream) that will actually
perform the stated function on the applicant’s behalf. Where the function is to be
performed by a downstream entity, there must be contracts in place through which the
applicant has delegated a function to a first tier entity, which has in turn delegated that
function to the downstream entity.
Applicants must identify HPMS the first tier and downstream entities with which it
has contracted to perform the listed Part D functions. The chart below is provided
to assist applicants in identifying the information that must be provided in HPMS.
Note concerning parent and subsidiary relationships: In establishing its
subcontracting arrangements, an applicant must clearly demonstrate that it has elected
to delegate certain Part D functions to first tier and downstream entities. Where an
applicant is a subsidiary to a parent organization and that organization purports to
contract with other entities on the applicant’s behalf, the applicant must consider the
parent organization a first tier entity and provide a contract between itself and its parent
that meets Part D requirements. CMS will not consider any other types of materials,
including articles of incorporation, organizational charts, or lists of board members or
senior executives, which the applicant might believe demonstrate that the parent is
authorized to contract on the applicant’s behalf.
Instructions: In HPMS, on the Contract & Management/Part D Information/Part D Data
Page, provide names of the first tier, downstream and related entities you will use to
carry out each of the functions listed in this chart and whether the first tier, downstream
and related entities are off-shore. Organizations applying for an SAE should ensure
that the information in HPMS is up-to-date for the current contract year.
(Indicate with “name of Applicant’s Organization” where applicant will perform those
28

functions)
Function

First tier, Downstream
and Related entities

A pharmacy benefit program that
performs adjudication and
processing of pharmacy claims at
the point of sale.
A pharmacy benefit program that
performs negotiation with
prescription drug manufacturers
and others for rebates, discounts,
or other price concessions on
prescription drugs.
A pharmacy benefit program that
performs administration and
tracking of enrollees’ drug benefits
in real time, including TrOOP
balance processing.
A pharmacy benefit program that
performs coordination with other
drug benefit programs, including,
for example, Medicaid, state
pharmaceutical assistance
programs, or other insurance.
A pharmacy benefit program that
develops and maintains a
pharmacy network.
A pharmacy benefit program that
operates an enrollee grievance
and appeals process
A pharmacy benefit program that
performs customer service
functionality, that includes serving
seniors and persons with a
disability.
A pharmacy benefit program that
performs pharmacy technical
assistance service functionality.
29

Off-Shore
yes/no

Function

First tier, Downstream and
Related entities

Off-Shore yes/no

A pharmacy benefit program that
maintains a pharmaceutical and
therapeutic committee.
A pharmacy benefit program that
performs enrollment processing.
Data Validation Contractor

For this item, applicant may
list the organization as “TBD”.

Data Validation Pre-Assessment
Consultant

For this item, applicant may
list the organization as “TBD”.

D. First Tier, Downstream, and Related Entity Relationship Chart
Prepare and upload into HPMS a chart showing the relationship between the applicant
and each first tier, downstream, and related entity identified in section 3.1.1 C. This
chart must include the names of all entities in the contracting chain between the
applicant and the entity performing the identified function. An example of a chart is
provided below for reference

Applicant
Parent (First Tier Entity)
PBM (Downstream Entity)
E. Except for SAE applicants, upload copies of executed contracts, fully executed
letters of agreement, administrative services agreements, or intercompany
agreements (in word-searchable .pdf format) with each first tier, downstream or
related entity identified in Sections 3.1.1 C (EXCEPT for the Data Validation
Contractor and Data Validation Pre-Assessment Consultant) and with any first
tier, downstream, or related entity that contracts with any of the identified entities
on the applicant’s behalf. As noted above, this requirement applies even if an
entity contracting on the applicant’s behalf is the applicant’s parent organization
or a subsidiary of the applicant’s parent organization. Unless otherwise indicated,
each and every contract must:
1. Clearly identify the parties to the contract (or letter of agreement). If the applicant is
not a direct party to the contract (e.g., if one of the contracting entities is entering
30

into the contract on the applicant’s behalf), the applicant must be identified as an
entity that will benefit from the services described in the contract.
2. Describe the functions to be performed by the first tier, downstream or related entity,
and the reporting requirements the first tier, downstream, or related entity has to the
applicant. 42 CFR §423.505(i)(4)(i)
3. Contain language clearly indicating that the first tier, downstream, or related entity
has agreed to participate in your Medicare Prescription Drug Benefit program
(except for a network pharmacy if the existing contract would allow participation in
this program).
4. Contain flow-down clauses requiring that any services or other activity they perform
in accordance with the contract be consistent and comply with the applicant’s
contractual obligations as a Part D sponsor. 42 CFR §423.505(i)(3)(iii)
5. Describe the payment or other consideration the parties have agreed that the
first tier, downstream, or related entity will receive for performance under the
contract. Applicants may not redact this information.
6. Clearly indicate that the contract is for a term of at least the initial one-year contract
period (i.e., January 1 through December 31) for which this application is being
submitted. Where the contract is for services or products to be used in preparation
for the next contract year’s Part D operations (e.g., marketing, enrollment), the initial
term of such contract must include this period of performance (e.g., contracts for
enrollment-related services must have a term beginning no later than October 15
extending through the full contract year ending on December 31 of the next year).
7. Be signed by a representative of each party with legal authority to bind the entity.
8. Contain language obligating the first tier, downstream, or related entity to abide by
all applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
9. Contain language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the confidentiality and
security provisions stated in the regulations for this program at 42 CFR §423.136.
10. Contain language ensuring that the first tier, downstream, or related entity will make
its books and other records available in accordance with 42 CFR §423.505(e)(2) and
42 CFR §423.505(i)(2). Generally stated, these regulations give HHS, the
Comptroller General, or their designees the right to audit, evaluate and inspect any
books, contracts, records, including medical records and documentation involving
transactions related to CMS’ contract with the Part D sponsor and that these rights
continue for a period of 10 years from the final date of the contract period or the date
of audit completion, whichever is later. 42 CFR §423.505(e)(2) and (i)(2)
11. Contain language that the first tier, downstream, or related entity will ensure that
beneficiaries are not held liable for fees that are the responsibility of the Part D
sponsor. 42 CFR §423.505(i)(3)(i)
12. Contain language that delegated activities or reporting responsibilities may be
revoked if CMS or the Part D sponsor determines the first tier, downstream, or
related entity has not performed satisfactorily. The contract/administrative services
agreement may include remedies in lieu of revocation to address this requirement.
31

42 CFR § 423.505(i)(4)(ii)
13. Contain language specifying that the applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity on an
ongoing basis. The contract must explicitly provide that the sponsor itself will
perform ongoing monitoring. Language indicating that the sponsor has the
right to monitor is not sufficient; the contract must affirmatively state that the
sponsor will monitor the entity on an ongoing basis. 42 CFR §423.505(i)(4)(iii)
14. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network, contain language that the Part D
sponsor retains the right to approve, suspend, or terminate any arrangement with a
pharmacy. 42 CFR §423.505(i)(5)
15. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network, contain language that payment to
such pharmacies (excluding long-term care and mail order) shall be issued, mailed,
or otherwise transmitted with respect to all clean claims submitted by or on behalf of
pharmacies within 14 days for electronic claims and within 30 days for claims
submitted otherwise. 42 CFR §§423.505(i)(3)(vi) and 423.520
16. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network, contain language that if a
prescription drug pricing standard is used for reimbursement, identify the source
used by the Part D sponsor for the standard of reimbursement. 42 CFR
§§423.505(b)(21) and 423.505(i)(3)(viii)(B)
17. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network, and the source for any prescription
drug pricing standard is not publicly available, a provision for disclosing all individual
drug prices to be updated to the applicable pharmacies in advance of their use for
reimbursement of claims. 42 CFR §423.505(i)(3)(vii)
18. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network and a prescription drug pricing
standard is used for reimbursement, contain a provision that updates to such a
prescription drug pricing standard occur not less frequently than once every 7 days
beginning with an initial update on January 1 of each year, to accurately reflect the
market price of acquiring the drug. 42 CFR §423.505(b)(21) and (i)(3)(viii)(A)
19. If the first tier, downstream, or related entity will establish the pharmacy network or
select pharmacies to be included in the network, contain language requiring the
network pharmacies to submit claims to the Part D sponsor or first tier, downstream
or related entity whenever the membership ID card is presented or on file at the
pharmacy unless the enrollee expressly requests that a particular claim not be
submitted. 42 CFR § 423.120(c)(3)
20. If the first tier, downstream, or related entity will adjudicate and process claims at the
point of sale and/or negotiate with prescription drug manufacturers and others for
rebates, discounts, or other price concessions on prescription drugs, contain
language that the first tier, downstream, or related entity will comply with the
reporting requirements established in 42 CFR §423.514(d) and (e).
Each complete contract must meet all of the above requirements when read on its own.
32

DO NOT UPLOAD a contract for the Data Validation Contractor or the Data
Validation Pre-Assessment Consultant. It is not required and will not be reviewed.
F. Except for SAE applicants, upload electronic lists of the
contract/administrative service agreement/intercompany agreement citations
demonstrating that the requirements of Section 3.1.1 E are included in each
contract and administrative service agreement. Submit these data by
downloading the appropriate spreadsheet found in HPMS that mimics the
crosswalk in Appendix X of this solicitation. If the applicant fails to upload
crosswalks for executed agreements and contract templates, CMS cannot
guarantee that the applicant will receive notice of any deficiencies in the
contracting documents as part of this courtesy review.
G. In HPMS, complete the table below:
Only applicable to PDP and MA-PD initial applicants.
Attest ‘yes’ or ‘no’ to the following qualification by clicking on
the appropriate response in HPMS:

Yes

Applicant is applying to operate as a Part D sponsor through a joint
enterprise agreement.
H. Special Requirement for Joint Enterprise Applicants: If applicant
answered the attestation in section 3.1.1.G as YES, then joint enterprise
applicants must upload (in .pdf format) a copy of the agreement executed by
the State-licensed entities describing their rights and responsibilities to each
other and to CMS in the operation of a Medicare Part D benefit plan. Such an
agreement must address at least the following issues:
•

Termination of participation in the joint enterprise by one or more of the
member organizations; and

•

Allocation of CMS payments among the member organizations.

3.1.2 Licensure and Solvency 42 CFR Part 423, Subpart I
Only applicable for PDP initial or SAE applicants, including those offering EGWPs. Not
applicable to Employer/Union Direct applicants
A. In HPMS, on the Contract Management/General Information/NAIC Data Page,
provide the National Association of Insurance Commissioners (NAIC) number if
currently licensed. Note that applicants for new PDPs will not be able to complete this
section in HPMS until after the courtesy review period is over.
B. In HPMS, complete the table below:
Attest ‘Yes,’ ‘No,’ or “Does Not Apply” to the following licensure
requirements.
Applicant is licensed under State law as a risk-bearing entity eligible
to offer health insurance or health benefits coverage in each State in
which the Applicant proposes to offer Part D drug benefits.
•

If the answer to this attestation is “YES,” then upload in HPMS the
documentation (e.g., licensing certificate or letter), from each
state licensing authority of your organization’s status as an entity
entitled to bear risk.

•

If the answer to this attestation is “NO” see Attestation #2 and
complete the Federal Waiver of State Licensure application
found in Appendix VII for every state in your proposed service
area in which you are not licensed.

If the applicant is not State licensed as a risk-bearing entity eligible
to offer health insurance or health benefits coverage in each State in
which the applicant proposes to offer Part D benefits, is the applicant
licensed as a risk-bearing entity in at least one State?
•

•

If the answer to this attestation is “NO,” the applicant must
submit via HPMS the Appendix entitled Financial Solvency
Documentation.

Yes No

Attest ‘Yes,’ ‘No,’ or “Does Not Apply” to the following licensure
requirements.

Yes No

Applicant is currently under supervision, corrective action plan
or special monitoring by the State licensing authority in any
State.
•

If the answer to this attestation is “Yes”, upload in HPMS an
explanation of the specific actions taken by the State license
regulator. In these cases, CMS reserves the right to require the
applicant to demonstrate that it meets the CMS-published
financial solvency and capital adequacy requirements.

3.1.3 Program Integrity 2 CFR part 376 and Compliance Program 42 CFR §
423.504(b)(4)(vi); Prescription Drug Benefit Manual, Chapter 9
Not applicable to SAE applicants.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ or ‘no’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant, applicant staff, and its affiliated companies,
subsidiaries or first tier, downstream and related
entities, and staff of the first tier, downstream and
related entities agree that they are bound by 2 CFR
Part 376 and attest that they are not excluded by the
Department of Health and Human Services Office of
Inspector General or by the General Services
Administration exclusion lists. Please note that this
includes any member of its board of directors, and any
key management or executive staff or any major
stockholder. Additionally, given Medicare payment
may not be made for items or services furnished by an
excluded provider or entity, applicant should follow the
guidance provided in the June 29, 2011, HPMS memo
entitled Excluded Providers.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

B. Provide as an upload via HPMS, in a .pdf format, a copy of your organization’s
Medicare Part D Compliance Program that you intend to use for this contract.
The Part D compliance program must be in accordance with 42 CFR 423.504(b)(4)(vi).
The compliance program must explicitly include the name of the applicant. (The name
of a parent organization is insufficient.) The Part D compliance program must include
all seven elements in the regulation and in Chapter 9 and are specific to the issues and
challenges presented by the Part D program. The compliance plan must explicitly state
that it encompasses Medicare Part D. A general compliance program applicable to
healthcare operations is not acceptable.
Please be advised that the applicant is ultimately responsible for the implementation
and monitoring of the day-to-day operations of its Part D compliance program. 42 CFR
§ 423.504(b)(4)(vi)(B)(1) indicates that the compliance officer and compliance
committee functions may not be delegated or subcontracted. This means that the
Medicare Compliance Officer identified in HPMS contacts (see section entitled HPMS
Part D Contacts) must be an employee of the applicant, the applicant’s parent
organization, or a corporate affiliate of the applicant. A compliance program adopted
and operated by an applicant’s first tier, downstream, and related entities is not
sufficient to demonstrate that the applicant meets the compliance program
requirement.
C. In HPMS, complete and upload the table in Appendix XVIII for the
Compliance Plan.

3.1.4 HPMS Part D Contacts
Not applicable to SAE applicants.
A. In HPMS, in the Contract Management/Contact Information/Contact Data
page provide the name/title; mailing address; phone number; fax number; and
email address for the applicant contacts listed in HPMS.
Note 1: The same individual should not be identified for each of these contacts. If a
general phone number is given then CMS requires specific extensions for the
individual identified. Under no circumstances should these numbers merely lead to a
company’s general automated phone response system. Further, applicants must
provide specific email addresses for the individuals named.
Note 2: Contact definitions are provided in HPMS in the Contract
Management/Contact Information/Contact Data/Documentation link entitled Contact
Definitions. The CEO, Chief Financial Officer, Chief Operating Officer, and Medicare
Compliance Officer must be employees of the applicant, the applicant’s parent
organization, or a subsidiary of the applicant’s parent organization. Please note that it
is CMS’ expectation that the MA and Part D Application Contact be a direct employee
of the applicant.

In HPMS, complete the table below:

Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract. Yes
Attest ‘yes’ or ‘no’ to the following qualification
by clicking on the appropriate response in HPMS:

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant agrees that CMS may release contact
information to States, SPAPs, providers, Part D
sponsors, and others who need the contact
information for legitimate purposes.

3.2 Benefit Design
Not applicable to SAE applicants.

3.2.1 Formulary/Pharmacy and Therapeutics (P&T) Committee Social
Security Act §186-D-4(b)(3)(G), 42 CFR §423.120(b), 42 CFR
§423.272(b)(2); Prescription Drug Benefit Manual, Chapter 6
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the
following qualifications to be approved for a Part
D contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant will submit a formulary to CMS for the Part
D benefit by the date listed in section 1.3. Applicant
will link all associated contracts to an initial formulary
submission on or before the formulary submission
deadline; otherwise, Applicant will be considered to
have missed the formulary submission deadline.
Applicant has reviewed, understands, and complies
with formulary guidance that is contained in the Code
of Federal Regulations (42 CFR §423.120(b)),
Chapter 6 of the Prescription Drug Benefit Manual,
the HPMS Formulary Submission Module and
Reports Technical Manual, and all other formulary
instructions.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant must attest ‘yes’ to each of the
following qualifications to be approved for a Part
D contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant agrees, when using a formulary, to meet all
formulary submission deadlines established by CMS.
Applicant further agrees that CMS may discontinue
its review of the applicant’s formulary submission
upon the applicant’s failure to meet any of the
formulary submission deadlines. Applicant
acknowledges that failure to receive CMS approval of
its formulary may prevent CMS from approving the
applicant’s bid(s) and contracting with the applicant
for the following benefit year.
B. In HPMS, complete the table below:
If applicant is intending for its Part D benefit to include the
use of a formulary, then Applicant must also provide a P&T
committee member list either directly or through its pharmacy
benefit manager (PBM). Applicant must attest ‘yes’ or ‘no’
that it is using its PBM’s P&T committee, in order to be
approved for a Part D contract. Attest ‘yes’ or ‘no’ by clicking
the appropriate response in HPMS:
Applicant is using the P&T Committee of its PBM for purposes of
the Part D benefit.
If answered yes to B1, Applicant’s PBM is operating under a
confidentiality agreement for purposes of the P&T Committee
(meaning Applicant has no knowledge of the membership of the
PBM’s P&T Committee). (If not applicable, check “NO.”) Note: If
answer is YES, then applicant must complete P&T Committee
Certification Statement and PBM must complete the P&T
Committee Member List located in Appendix XVI entitled Applicant
Submission of P&T Committee Member List and Certification
Statement.

Yes

No/
N/A

If applicant is intending for its Part D benefit to include the
use of a formulary, then Applicant must also provide a P&T
committee member list either directly or through its pharmacy
benefit manager (PBM). Applicant must attest ‘yes’ or ‘no’
that it is using its PBM’s P&T committee, in order to be
approved for a Part D contract. Attest ‘yes’ or ‘no’ by clicking
the appropriate response in HPMS:

Yes

No/OR
N/A

Applicant has reviewed, understands, and complies with the
requirements related to the use and development of a P&T
Committee contained in the Code of Federal Regulations (42 CFR
§423.120(b)(1)), Chapter 6 of the Prescription Drug Benefit
Manual, the HPMS Formulary Submission Module and Reports
Technical Manual, and all other guidance related to P&T
committees..
Note: While the P&T committee may be involved in providing
recommendations regarding the placement of a particular Part D
drug on a formulary cost-sharing tier, the ultimate decision maker
on such formulary design issues is the Part D plan sponsor, and
that decision weighs both clinical and non-clinical factors.
C. If applicant intends to use a formulary for its Part D benefit, then the names of
P&T committee members must be provided to CMS either directly by the
applicant or by the applicant’s PBM. To provide names of P&T committee
members directly, enter names in HPMS’ Contract Management/Part D Data page.
If the PBM operates under a confidentiality agreement (where the applicant does
not know the membership of the PBM’s P&T Committee) refer to Appendix XVI
entitled Applicant Submission of P & T Committee Member List and Certification
Statement for additional instructions.

3.2.2 Utilization Management Standards 42 CFR §423.153(b); Prescription
Drug Benefit Manual, Chapter 6 and Chapter 7\
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification
by clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies
with utilization management requirements in 42 CFR
§423.153(b), Chapters 6 and 7 of the Prescription
Drug Benefit Manual, and related CMS guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

3.2.3 Quality Assurance and Patient Safety Social Security Act §1860D4(c)(3); 42 CFR §423.153(c); Prescription Drug Benefit Manual,
Chapter 7
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Applicant has reviewed, understands, and complies with
requirements related to quality assurance and patient
safety in section 1860D-4(c)(3) of the Act, 42 CFR
§423.153(c), Chapter 7 of the Prescription Drug Benefit
Manual, and related CMS guidance. This includes
requirements related to drug utilization review,
medication error identification, and prevention of
wasteful dispensing of prescription drugs.

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

3.2.4 Medication Therapy Management 42 CFR §423.153(d); Social Security
Act § 1860D-4(c)(2); Prescription Drug Benefit Manual, Chapter 7;
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the
following qualifications to be approved for a Part
D contract. Attest ‘yes’ or ‘no’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant has reviewed, understands, and complies
with requirements related to developing and
implementing a Medication Therapy Management
(MTM) program described in section 1860D-4(c)(2) of
the Act, 42 CFR §423.153(d), Chapter 7 of the
Prescription Drug Benefit Manual, and related
guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS
)

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

The Applicant agrees to submit a description of its
MTM program including, but not limited to, policies,
procedures, services, payments and criteria used for
identifying beneficiaries eligible for the MTM
program. 42 CFR §423.153(d)(6) Note: This
description is not due at the time of this application.

3.2.5 Electronic Prescription Program and Health Information Technology
Standards 42 CFR §423.159; Prescription Drug Benefit Manual,
Chapter 7; P.L. 111-5 (2009);
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D
contract. Attest ‘yes’ or ‘no’ to the following
qualification by clicking on the appropriate
response in HPMS:
Applicant has reviewed, understands, and complies
with electronic prescription and Health Information
Technology requirements contained in P.L. 111-5
(2009), 42 CFR §423.159, Chapter 7 of the
Prescription Drug Benefit Manual, and all related
guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

3.2.6 Bids 42 CFR § 423.104, §423.265 and §423.272
Not applicable to Cost Plan applicants or employer only applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification
by clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
MAPD
APPLICANTS)

Applicant limits the number of submitted bids in a
service area to those that would demonstrate
meaningful differences in benefit packages or plan
costs to a beneficiary.

3.3 Service Area/Regions 42 CFR §423.112; Prescription Drug
Benefit Manual, Chapter 5
Not applicable to Cost Plan applicants.
A. Complete in HPMS, in the Contract Management/Contract Service Area/Service
Area Data page, the service area information indicating the regions (including
territories) you plan to serve. PDP and MA-PD region and Territory
information may be found on the www.cms.gov/ website. Be sure to list both
the region/territory name and associated number. Note: CMS bases its
pharmacy network analyses on the service area your organization inputs into
HPMS. Please make sure that the service area information you input into
HPMS corresponds to the pharmacy lists that are provided under the
Pharmacy Access section of the application.
B. In HPMS, complete the table below. Only applicants for new PDPs or new
RPPOs should complete this table.
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘Yes’ or ‘No’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
For all regions in which the applicant offers a prescription
drug plan, the applicant provides coverage in the entire
region. (Only PDP applicants will complete this
attestation.)
Applicant offers Part D coverage for the entire MA
region(s) to be operated under the Regional PPO plan.
(Only RPPO applicants will complete this attestation.)
42

Yes

Requesting
a Waiver?
(Only for
RPPO
applicants)

3.4 Private Fee-For-Service Pharmacy Access 42 CFR
§423.120(a)(7); Prescription Drug Benefit Manual, Chapter 5
In HPMS, complete the table below ONLY if you are a Private Fee For Service
applicant, including both initial applications and SAEs. Otherwise, proceed
directly to General Pharmacy Access.
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate response
in HPMS:

Yes

Requesting
Waiver?

Applicant uses a contracted network of pharmacies and
therefore meets the retail pharmacy convenient access
standards; LTC and I/T/U pharmacy convenient access
standards; and home infusion pharmacy adequate access
standards.
If applicant attests ‘NO’ to 3.4.1, applicant has reviewed,
understands, and complies with requirements related to
coverage of prescription drugs for PFFS plans that do not
utilize contracted pharmacy networks. These
requirements are found in 42 CFR §423.120(a)(7),
Chapter 5 of the Prescription Drug Benefit Manual, and
related guidance.
If applicant attests No to 3.4 1, and Yes to 3.4 2, applicant may move directly to Section
3.6 and will be granted a waiver of convenient access.

3.5 General Pharmacy Access 42 CFR §423.120(a); Prescription Drug
Benefit Manual, Chapter 5
Not applicable for SAE applicants.
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the
following qualifications to be approved for a Part
D contract. Attest ‘Yes’ or ‘No’ to each of the
following qualifications by clicking on the
appropriate response in HPMS:
Applicant has reviewed, understands, and complies
with requirements related to pharmacy access and
contracting contained in 42 CFR §423.120(a),
Chapter 5 of the Prescription Drug Benefit Manual,
and related guidance.
43

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

B. Upload in HPMS a contract template in .pdf format for each for the following
types of pharmacies: Retail, Mail Order, Home Infusion, Long-Term Care and
I/T/U. The mail order contract template is only necessary if the plan is offering
mail order. The I/T/U template is only necessary if the Applicant’s service area
includes states in which I/T/U pharmacies reside. If Applicant has contracted with
a Pharmacy Benefit Manager to provide a pharmacy network, those downstream
contract templates must also be uploaded. If there are several different types of
standard terms and conditions for the same type of pharmacy, please provide a
contract template for all versions and label according to type of pharmacy. For
example, if different terms for retail pharmacies apply depending upon
geographic location, a separate template representing each variation must be
provided. Each contract template type must contain the unsigned standard terms
and conditions, including the provisions listed in the Appendices entitled:
•

Crosswalk for Retail Pharmacy Contracts

•

Crosswalk for Mail Order Pharmacy Contracts

•

Crosswalk for Home Infusion Pharmacy Access Contracts

•

Crosswalk for Long-Term Care Pharmacy Access Contracts

•

Crosswalk for I/T/U Pharmacy Access Contracts.

C. Upload in HPMS crosswalks of the Pharmacy Access Contract Citations [for
Retail, Mail Order (if offered), Home Infusion, Long-Term Care and I/T/U Pharmacy
networks] demonstrating that all applicable requirements are included in such
contracts. Submit this data by downloading the Microsoft Excel worksheets from
HPMS that are located on the Pharmacy Upload page, complete the worksheets
and upload the finished document back into HPMS for each of the Appendices
entitled:
•

Crosswalk for Retail Pharmacy Contracts

•

Crosswalk for Mail Order Pharmacy Contracts

•

Crosswalk for Home-Infusion Pharmacy Access Contracts

•

Crosswalk for Long-Term Care Pharmacy Access Contracts

•

Crosswalk for I/T/U Pharmacy Access Contracts.

3.6 Retail Pharmacy 42 CFR §423.120(a); 42 CFR §423.859(c);
Prescription Drug Benefit Manual, Chapter 5
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract. Attest
‘yes’ or ‘no’ to each of the following qualifications by clicking
on the appropriate response in HPMS:

Yes

Applicant has reviewed, understands, and complies with all
requirements related to retail pharmacy access contained in 42
CFR §§423.120(a) & 423.859(c), Chapter 5 of the Prescription
Drug Benefit Manual, and related guidance.
Applicant is requesting a waiver of convenient access
requirements (only applicable for MAPD and Cost Plan
applicants). If “yes”, complete parts E and F, below.
Applicant is requesting a waiver of any willing pharmacy
requirements (only applicable for MAPD and Cost Plan
applicants. If “yes”, complete part G, below.
B. Upload in HPMS the Retail Pharmacy List (not applicable to Employer/Union
Only Group Waiver Plan SAE applicants):
To submit retail pharmacy listings to CMS, applicants must download the Microsoft
Excel worksheet from HPMS that is located specifically on the Pharmacy Upload page,
complete the worksheet and upload the finished document back into HPMS.
C. Submission of Supporting Discussion in Areas Failing to Meet Access
Standards (not applicable to Employer/Union Only Group Waiver Plan SAE
applicants)
CMS will consider supporting discussion provided by an applicant in evaluating the
applicant’s application to determine if applicant is qualified to be a Part D Sponsor.
While you have the opportunity to provide this discussion, CMS’ expectation is that your
organization will meet the required access standards in all cases. Providing the
discussion below does not mean CMS will allow you to fail the access standards, but in
extreme or unusual circumstances, we may consider this information.
Provide as an upload in HPMS, in .pdf format, the following information to demonstrate
that meeting the access standard within the service area is not practical or is
impossible.

1. Indicate the geographic areas in which the applicant cannot demonstrate that it
meets the retail pharmacy convenient access standards
2. Explain why these standards cannot be met. Include in the discussion relevant
information such as geographic barriers, pharmacy infrastructure barriers, and/or
market barriers.
3. Describe how the pharmacies in the applicant’s retail contracted network will provide
access to all eligible Part D individuals enrolled in the applicant’s plan(s) in each of
the geographic areas defined in item 1 above.
D. In HPMS, indicate whether you are seeking a waiver of the convenient access
standards for the territories in which your organization intends to offer the Part D
benefit. If your organization is not intending to offer the Part D benefit in the
territories check N/A within HPMS. (Not applicable to Employer/Union Only
Group Waiver Plan SAE applicants.)
Territory

Yes

N/A

Region 35 – American Samoa
Region 36 – Guam
Region 37 – Northern Mariana Islands
Region 39 – US Virgin Islands
E. Complete the following if you marked YES to requesting a waiver of
convenient access standards for any of the territories in 3.4.1D. In HPMS, in .pdf
format, provide the following information (not applicable to Employer/Union Only
Group Waiver Plan SAE applicants):
1. Explain why your organization cannot demonstrate compliance with the access
standards or why these standards cannot be met.
2. Describe the applicant’s efforts to identify and contract with all of the retail
pharmacies in each of the applicable territories.
3. Describe how the pharmacies in the applicant’s contracted network demonstrate
convenient access to all eligible Part D individuals enrolled in the applicant’s plan(s)
in each of the territories listed above as not meeting the standards in §423.120(a)(1).
F. If you marked YES to requesting a waiver of convenient access standards for
any of the territories in 3.4.1D, in HPMS complete the table below (not applicable
to PDP and Employer/Union Only Group Waiver Plan SAE applicants):
Data Element

Number

Provide the number of prescriptions provided in 2022 by retail
pharmacies owned and operated by applicant.

Data Element

Number

Provide the number of prescriptions provided in 2022 at all retail
pharmacies contracted by applicant.
NOTE: CMS will determine the percentage of prescriptions provided at retail
pharmacies owned and operated by applicant over total prescriptions provided at all
retail pharmacies contracted by applicant.
G. If you marked “YES” to requesting a waiver of any willing pharmacy
requirements, in HPMS complete the table below (not applicable to PDP
applicants and Employer/Union Only Group Waiver Plan SAE applicants):
Data Element

Number

Provide the number of prescriptions provided in 2022 by all pharmacies
owned and operated by applicant.
Provide the number of prescriptions provided in 2022 at all pharmacies
contracted by applicant.
NOTE: CMS will determine the percentage of prescriptions provided at all pharmacies
owned and operated by applicant over total prescriptions provided at all pharmacies
contracted by applicant.

3.7 Out of Network Access 42 CFR §423.124; Prescription Drug
Benefit Manual, Chapter 5
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies
with requirements related to access to drugs at out-ofnetwork pharmacies contained in 42 CFR §423.124,
Chapter 5 of the Prescription Drug Benefit Manual, and
related guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

3.8 Mail Order Pharmacy 42 CFR §423.120(a)(10); Prescription Drug
Benefit Manual, Chapter 5
A. In HPMS, complete the table below:
Applicants may offer a mail order option in addition to their
contracted Part D pharmacy network but mail order pharmacies
do not count in meeting network adequacy standards. Indicate
in HPMS ‘yes’ or ‘no’ whether such mail order pharmacy is
offered.

Yes

Applicant offers mail order pharmacy as part of its Part D plans.
B. Mail Order Pharmacy List (not applicable to EGWP-only service area/coverage
expansion applicants):
To submit mail order pharmacy lists to CMS, applicants must download the Microsoft
Excel worksheet from HPMS that is located on the Pharmacy Upload page, complete
the worksheet, and upload the finished document back into HPMS.

3.9 Home Infusion Pharmacy 42 CFR §423.120(a)(4); Prescription
Drug Benefit Manual, Chapter 5
Home Infusion Pharmacy List (not applicable to EGWP-only service
area/coverage expansion applicants):
To submit home infusion pharmacy listings to CMS, applicants must download the
Microsoft Excel worksheet template from HPMS that is located on the Pharmacy Upload
page, complete the worksheet, and upload the finished document back into HPMS.

3.10 Long -Term Care (LTC) Pharmacy 42 CFR §423.120(a)(5);
Prescription Drug Benefit Manual, Chapter 5
A. In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant offers standard contracting terms and
conditions to all long-term care pharmacies in its
service area.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies
with requirements related to long term care pharmacy
access and contracting contained in 42 CFR
§423.120(a)(5), Chapter 5 of the Prescription
Drug Benefit Manual, and all related guidance.
Applicant readily negotiates with States with regard to
contracting with State-run and operated LTC
pharmacies in facilities such as ICFs/MR, IMDs, and
LTC hospitals. States may not be able to agree to
certain clauses in some LTC standard contracts
because of constitutional and legal restraints.
Applicants should be prepared to negotiate with States
to address these issues.
B. LTC Pharmacy List (not applicable to EGWP-only service area/coverage
expansion applicants)
To submit LTC pharmacy listings to CMS, applicants must download the Microsoft Excel
worksheet template from HPMS that is located on the Pharmacy Upload page, complete
the worksheet and upload the finished document back into HPMS.

3.11 Indian Health Service, Indian Tribe and Tribal Organization, and
Urban Indian Organization (I/T/U) Pharmacy 42 CFR
§423.120(a)(6); Prescription Drug Benefit Manual, Chapter 5
A. In HPMS, complete the table below:
Not all Part D regions have I/T/U pharmacies. If the
Applicant’s service area covers any region that includes
I/T/U pharmacies, then the Applicant must attest ‘yes’ to the
following qualifications to be approved for a Part D contract.
To determine if I/T/U pharmacies reside in your service area,
review the I/T/U reference file located on the CMS webpage:
www.cms.gov/prescriptiondrugcovcontra/ ITU LTC HI
Reference Files”. Attest ‘yes,’ ‘no’ or ‘n/a’ to the following
qualification by clicking on the appropriate response in
HPMS:

Yes

N/A

Applicant has reviewed, understands, and complies with
requirements related to I/T/U access and contracting contained
in 42 CFR §423.120(a)(6), Chapter 5 of the Prescription Drug
Benefit Manual, and all related guidance.
B. I/T/U Pharmacy List (not applicable to EGWP-only service area/coverage
expansion applicants):
In order to demonstrate that a Part D applicant meets these requirements, applicants
must submit a complete list of all I/T/U pharmacies to which it has offered contracts.
CMS provides the current list of I/T/U pharmacies, including the official name, address,
and provider number (when applicable). The applicant’s list must be submitted using
the Microsoft Excel template provided by CMS on the HPMS Pharmacy Upload page,
and must include all I/T/U pharmacies residing in any and all states within its service
area.
To submit I/T/U pharmacy listings to CMS, applicants must first download the Microsoft
Excel worksheet template from HPMS that is located on the Pharmacy Upload page,
complete the worksheet and upload the finished document back into HPMS.

3.12 Enrollment and Eligibility 42 CFR §423.30; Prescription Drug
Benefit Manual, Chapters 3, 4, and 13; Plan Communications User
Guide
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant has reviewed, understands, and complies with
requirements related to enrollment, disenrollment, and
eligibility contained in 42 CFR §423.30, Chapters 3, 4,
and 13 of the Prescription Drug Benefit Manual, the
Plan Communications User Guide, and all related
enrollment and disenrollment guidance and technical
specifications.
Applicant has reviewed, understands, and complies with
CMS operational guidance on Creditable Coverage and
the Late Enrollment Penalty, including the Best
Available Evidence requirements contained in 42 CFR
§423.800(d).

Yes

Requesting a
Waiver?
No
(ONLY FOR
COST AND
MAPD
APPLICANTS)

3.13 Complaints Tracking 42 CFR §423.505(b)(22); Prescription Drug
Benefit Manual, Chapter 7
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
all requirements related to complaints tracking and
resolution contained in 42 CFR §423.505(b)(22),
Chapter 7 of the Prescription Drug Benefit Manual, and
all related guidance.

3.14 Medicare Plan Finder Prescription Drug Benefit Manual, Chapter 7
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies with
all requirements related to data submission and quality
assurance for Medicare Plan Finder data contained in
Chapter 7 of the Prescription Drug Benefit Manual and
all related guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

3.15 Grievances 42 CFR Part 423 Subpart M; Prescription Drug Benefit
Manual, Chapter 18
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
all requirements related to beneficiary grievances
contained in 42 CFR Part 423 Subpart M, Chapter 18 of
the Prescription Drug Benefit Manual, and all related
guidance.

3.16 Coverage Determinations (including Exceptions) and Appeals 42
CFR Part 423 Subpart M; Prescription Drug Benefit Manual,
Chapter 18; Part D QIC Reconsideration Procedures Manual
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies with
requirements related to beneficiary coverage
determinations (including exceptions) and appeals
contained in 42 CFR Part 423 subparts M & U, Chapter
18 of the Prescription Drug Benefit Manual, the Part D
QIC Reconsiderations Procedures Manual, and all
related guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
No
COST AND
MAPD
APPLICANTS)

3.17 Coordination of Benefits 42 CFR Part 423 Subpart J; Prescription
Drug Benefit Manual, Chapter 14
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
requirements related to coordination of benefits
contained in 42 CFR Part 423 Subpart J, Chapter 14 of
the Prescription Drug Benefit Manual, and related
guidance.

3.18 Tracking True Out-of Pocket Costs (TrOOP) Social Security Act §
1860D-2(b)(4); 42 CFR Part 423 Subpart J; Prescription Drug
Benefit Manual, Chapters 13 and Chapter 14
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
requirements for tracking each enrollee’s true out of
pocket (TrOOP) costs contained in section 1860D2(b)(4) of the Act, 42 CFR Part 423 subpart J, Chapters
13 and 14 of the Prescription Drug Benefit Manual, and
all related guidance.
NOTE: For information regarding the TrOOP facilitator, Applicant may link to
https://medifacd.ndchealth.com/

3.19 Medicare Secondary Payer 42 CFR §423.462; Prescription Drug
Benefit Manual, Chapter 14
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
all Medicare Secondary Payer (MSP) requirements,
including those contained in 42 CFR §423.462, Chapter
14 of the Prescription Drug Benefit Manual, and related
guidance.
Applicant adheres to MSP laws and any other Federal
and State laws in establishing payers of last resort.

3.20 Marketing/Beneficiary Communications 42 CFR §423.128; 42 CFR
§423.505; Prescription Drug Benefit Manual, Chapter 2
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies with
all requirements related to marketing and beneficiary
communications, including those contained in 42 CFR
§§423.128 &423.505, Chapter 2 of the Prescription Drug
Benefit Manual, and all related guidance.

Yes

Requesting a
Waiver?
(ONLY FOR
No
COST AND
MAPD
APPLICANTS)

3.21 Reporting Requirements Social Security Act § 1150A; 42 CFR
§423.514; Annual Reporting Requirements
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant has reviewed, understands, and complies with
the Reporting Requirements Guidance that is posted on
the http://www.cms.gov/ website.
Applicant has reviewed, understands, and complies with
requirements for reporting financial and business
transaction information to CMS, including those
contained in 42 CFR §§423.514(b) & 423.501.
The applicant’s PBM provides information related to PBM
transparency as specified in section 1150A of the Act.

Requesting a
Waiver?
(ONLY FOR
Yes No
COST AND
MAPD
APPLICANTS)

3.22 Data Exchange between Part D Sponsor and CMS 42 CFR
§423.505(c) and (k)
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant uses HPMS to communicate with CMS in
support of the application process, formulary submission
process, bid submission process, ongoing operations of
the Part D program, and reporting and oversight
activities. Part D sponsors are required to secure access
to HPMS in order to carry out these functions.
Applicant establishes connectivity to CMS as noted in the
instructions provided by the MAPD Help Desk at 1-800927-8069 or via the MAPD Help Desk webpage,
https://www.cms.gov/Research-Statistics-Data-andSystems/CMS-InformationTechnology/mapdhelpdesk/index.html, in the Plan
Reference Guide for CMS Part C/D Systems link.
Applicant has reviewed, understands, and complies with
all requirements related to data exchange between
sponsors and CMS, including those contained in 42 CFR
§423.505(c) & (k).
In accordance with 42 CFR §423.322, the Applicant
provides CMS with any data required to ensure accurate
prospective, interim, and/or final reconciled payments
including, but not limited to, the following: test data,
Prescription Drug Event (PDE) records, enrollment
transactions, Direct and Indirect Remuneration (DIR)
data, discrepancy records, and premium payment data.

Requesting a
Waiver?
(ONLY FOR
Yes No COST AND
MAPD
APPLICANTS)

3.23 Health Insurance Portability and Accountability Act of 1996
(HIPAA), Health Information Technology for Economic and
Clinical Health Act (HITECH Act), and Related CMS Requirements
45 CFR Parts 160, 162, and 164
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant has reviewed, understands, and complies with
all applicable standards, implementation specifications,
and requirements in the Standards for Privacy of
Individually Identifiable Health Information and Security
Standards, Standards for Electronic Transactions, and
the Standard Unique Health Identifier for Health Care
Providers under 45 CFR Parts 160, 162, and 164.
Applicant transmits payment and remittance advice
consistent with the HIPAA-adopted ACS X12N 835,
Version 5010: Health Care Claim Payment and
Remittance Advice Implementation Guide (“835”).

Yes

Requesting a
Waiver?
(ONLY FOR
No
COST AND
MAPD
APPLICANTS)

3.24 Prohibition on Use of SSN or Medicare Beneficiary Identifier
Number on Enrollee ID Cards Prescription Drug Benefit Manual,
Chapter 2
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant does not use an enrollee’s Social Security
Number (SSN) or Medicare Beneficiary Identifier
number on the enrollee’s identification card.

3.25 Record Retention 42 CFR §423.505(d)
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

The applicant maintains, and requires its first tier,
downstream, and related entities to maintain, books,
records, documents, and other evidence of accounting
procedures and practices consistent with 42 CFR
§423.505(d).

Requesting a
Waiver?
(ONLY FOR
Yes No
COST AND
MAPD
APPLICANTS)

3.26 Prescription Drug Event (PDE) Records; 42 CFR Part 423 Subpart
G
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
No
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
CMS requirements and guidance related to submission
of PDE data, including 42 CFR Part 423 Subpart G, the
Regional Prescription Drug Event Data Participant
Training Guide and Technical Assistance Resource
Guides under the link, USERGROUP/technical
Assistance (www.csscoperations.com/) and related
guidance.
Applicant meets all data submission deadlines.
Applicant complies with Medicare Coverage Gap
Discount Program requirements.

3.27 Claims Processing; 42 CFR §423.120(c)(4); 42 CFR §423.466
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Applicant has reviewed, understands, and complies with
all requirements related to processing of electronic and
paper claims contained in 42 CFR §§423.120(c)(4),
423.466, & 423.520 and all related CMS guidance.

Requesting a
Waiver?
(ONLY FOR
Yes No
COST AND
MAPD
APPLICANTS)

3.28 Premium Billing 42 CFR §423.293
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to the following
qualification to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to the following qualification by
clicking on the appropriate response in HPMS:

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Applicant has reviewed, understands, and complies with
all requirements related to accurate premium billing,
including 42 CFR §423.293 and all related guidance.

3.29 Consumer Assessment of Healthcare Providers and Systems
(CAHPS) Survey Administration 42 CFR §423.156
Not applicable to SAE applicants.
In HPMS, complete the table below:
Applicant must attest ‘yes’ to each of the following
qualifications to be approved for a Part D contract.
Attest ‘yes’ or ‘no’ to each of the following
qualifications by clicking on the appropriate
response in HPMS:
Applicant agrees once its enrollment is more than 600
enrollees (as of July in the preceding contract year), it
will contract with an approved CAHPS survey vendor
and pay for the CAHPS data collection costs.

Yes

Requesting a
Waiver?
(ONLY FOR
COST AND
MAPD
APPLICANTS)

Upload in HPMS, in a .pdf format, the following certification:

4 CERTIFICATION
I,

(NAME & TITLE)

, attest to the following:

1. I have read the contents of the completed application and the information contained
herein is true, correct, and complete. If I become aware that any information in this
application is not true, correct, or complete, I agree to notify the Centers for
Medicare & Medicaid Services (CMS) immediately and in writing.
2. I authorize CMS to verify the information contained herein. I agree to notify CMS in
writing of any changes that may jeopardize my ability to meet the qualifications
stated in this application prior to such change or within 30 days of the effective date
of such change. I understand that such a change may result in termination of the
approval.
3. I agree that if my organization meets the minimum qualifications and is Medicareapproved, and my organization enters into a Part D contract with CMS, I will abide
by the requirements contained in Section 3.0 of this Application and provide the
services outlined in my application.
4. I agree that CMS may inspect any and all information necessary including inspecting
of the premises of the Applicant’s organization or plan to ensure compliance with
stated Federal requirements including specific provisions for which I have attested. I
further agree to immediately notify CMS if despite these attestations I become aware
of circumstances which preclude full compliance by January 1 of the upcoming
contract year with the requirements stated here in this application as well as in part
423 of 42 CFR.
5. I understand that in accordance with 18 U.S.C. §1001, any omission,
misrepresentation or falsification of any information contained in this application or
contained in any communication supplying information to CMS to complete or clarify
this application may be punishable by criminal, civil, or other administrative actions
including revocation of approval, fines, and/or imprisonment under Federal law.
6. I further certify that I am an authorized representative, officer, chief executive officer,
or general partner of the business organization that is applying for qualification to
enter into a Part D contract with CMS.
7. I acknowledge that I am aware that there is operational policy guidance relevant
to this application that is posted on the CMS website and that it is continually
updated. My organization will comply with such guidance should it be approved
for a Part D contract.
Name (printed)

Title

Signature

Date (MM/DD/YYYY)

5 APPENDICES

APPENDIX I – Summary of Medicare Part D Regulatory Requirements
Fulfilled under Part C for Medicare Advantage Prescription Drug (MAPD) Applicants
Part D
Regulation

Regulatory Requirement(s)

42 CFR 423
Subpart I,
excepting 42
CFR §423.440
(which concerns
Federal
preemption of
State law and
prohibition of
State premium
taxes)

Licensure and Solvency –
Applicant must be licensed to
bear risk in the State in which it
intends to operate or apply for
a licensure waiver and meet
CMS solvency standards.

Duplicative of MA Organization requirements
for licensure and solvency under 42 CFR
§422.400; and 42 CFR §422.501.

Utilization Management Applicant must have a cost
effective utilization
management system.

Waiver stated in regulations at 42 CFR
§423.153(e) excuses MA PFFS
organizations from meeting the utilization
management requirements specified in 42
CFR §423.153(b).

Medication Therapy
Management Program –
Applicant must have a program
to manage medication therapy
to optimize outcomes, reduce
adverse drug interactions.

Waiver stated in regulations at 42 CFR
§423.153(e) excuses MA PFFS
organizations from meeting Medication
Therapy Management Program
requirements specified in 42 CFR
§423.153(d).

Service Area – Applicant must
offer a Part D plan that serves
at least an entire PDP region.

Conflicts with MA regulations (42 CFR§
422.2) that allow MA organizations to offer
local MA plans (i.e., plans that serve less
than an entire state).

Pharmacy Network – Applicant
must offer its Part D plan
benefit through a contracted
retail pharmacy network that
meets CMS convenient access
standards.

Waiver stated in regulations at 42 CFR§
423.120(a)(7)(i) excuses from the Part D
convenient access standards those MA
organizations that administer their Part D
benefit through pharmacies owned and
operated by the MA organization if that
organization’s pharmacy network access
meets the MA convenient access standards.

42 CFR

§423.153(b)
Waiver applies
to MA-PFFS
only

42 CFR
§423.153(d)
Waiver applies
to MA-PFFS
only

42 CFR

§423.112(a)
42 CFR
§423.120(a)(7)(i)
Waiver applies
only to MA-PDs
that operate
their own
pharmacies

Basis for Waiver

Description

Part D
Regulation

42 CFR

§423.120(a)(7)(ii)
Waiver applies
to MA-PFFS
plan that
provides
access through
all pharmacies.
42 CFR

§423.120(a)(8)(i)
Waiver applies
only to MA-PDs
that operate
their own
pharmacies

42 CFR §423.34
42 CFR §423.36
42 CFR §423.38
42 CFR §423.40

Regulatory Requirement(s)

Basis for Waiver

Description
Pharmacy Network – Applicant
must offer its Part D plan
benefit through a contracted
retail pharmacy network that
meets CMS convenient access
standards

Waiver stated in regulations at 42 CFR
§423.120(a)(7)(ii). excuses from the Part D
convenient access standards those MAPFFS organizations that offer a qualified
prescription drug coverage, and provide
plan enrollees with access to covered Part D
drugs dispensed at all pharmacies, without
regard to whether they are contracted
network pharmacies and without charging
cost-sharing in excess of the requirements
for qualified prescription drug coverage.

Pharmacy Network – Applicant
must offer its Part D benefit
through any willing pharmacy
that agrees to meet reasonable
and relevant standard network
terms and conditions.

Waiver promotes the coordination of Parts C
and D benefits. Excuses from Part D anywilling-pharmacy requirement those MA
organizations that administer their Part D
benefit through pharmacies owned and
operated by the MA organization and
dispense at least 98% of all prescriptions
through pharmacies owned and operated by
Applicant.

Enrollment and Eligibility –
Applicant agrees to accept Part
D plan enrollments and
determine Part D plan eligibility
consistent with Part D program
requirements.

Duplicative of MA requirements under 42
CFR §422 Subpart B - Eligibility, Election,
and Enrollment. MA organizations will
conduct enrollment and determine eligibility
consistent with MA program requirements.
These requirements mirror those stated in
the Part D regulation.

Reporting Requirements –
Applicant must report
information concerning
significant business
transactions.

Duplicative of MA requirements for reporting
significant transactions under 42 CFR
§422.500 and 42 CFR §422.516(b) and (c)
and requirements for providing annual
financial statements.

Reporting Requirements –
Applicant must notify CMS of
any loans or any other special
arrangements it makes with
contractors, subcontractors,
and related entities.

Duplicative of MA requirement for reporting
loans or special arrangements under 42
CFR §422.516(e).

42 CFR §423.44

42 CFR
§423.514(b) and
(c)
42 CFR

§423.514(e)

Part D
Regulation
42 CFR

§423.512

Regulatory Requirement(s)

Basis for Waiver

Description
Experience and Capabilities –
Applicant must reach the
minimum enrollment standard
within the first year it offers a
Part D benefit.

Conflicts with MA regulation at 42 CFR
§422.514 that permits three years to achieve
the minimum enrollment level.

APPENDIX II – Summary of PDP Application Requirements Fulfilled
under Part C for Cost Plan Prescription Drug Applicants
Part D
Regulation

Regulatory Requirement(s)

Basis for Waiver

Description

42 CFR 423
Subpart I,
excepting 42
CFR §423.440
(which
concerns
Federal
preemption of
State law and
prohibition of
State premium
taxes)

Licensure and Solvency –
Applicant must be licensed to
bear risk in the State in which
it intends to operate or apply
for a licensure waiver and
meet CMS solvency
standards.

Duplicative of Cost Plan requirements for
licensure and solvency under 42 CFR
§417.404 (General requirements) and 42
CFR §417.407 (Requirements for a
Competitive Medical Plan (CMP)). All
Cost Plans are State licensed in some
manner or have authority to offer a Cost
Plan in all states in which they operate.

42 CFR
§423.112(a)

Service Area – Applicant must
offer a Part D plan that serves
at least an entire PDP region.

Conflicts with Cost Plan regulations (42
CFR §417.1) defining the service area for
HMOs and CMPs offering Medicare
reasonable Cost Plans.

Pharmacy Network – Applicant
must offer its Part D plan
benefit through a contracted
Waiver applies
retail pharmacy network that
only to Cost
meets CMS standards for
contractors that convenient access.
operate their
own
pharmacies

Waiver stated in regulations at 42 CFR
§423.120(a)(7)(i) excuses from the Part D
standards for convenient access those
Cost contractors that administer their Part
D benefit through pharmacies owned and
operated by the Cost contractor if that
organization’s pharmacy network access
meets the Cost Plan convenient access
standards . {Note: Applicants will be
expected to provide comparable
information in the application for
organizational pharmacies}

42 CFR
§423.120(a)(8)(i)
Waiver applies
only to Cost
contractors that
operate their
own
pharmacies

Waiver promotes the coordination of
Parts C and D benefits. Excuses from
Part D any-willing-pharmacy requirement
those Cost contractors that administer
their Part D benefit through pharmacies
owned and operated by the Cost
contractor and dispense at least 98% of
all prescriptions through pharmacies
owned and operated by Applicant.

42 CFR
§423.120(a)(3)

Pharmacy Network – Applicant
must offer its Part D benefit
through any willing pharmacy
that agrees to meet
reasonable and relevant
standard network terms and
conditions.

APPENDIX III – Attestation for Employer/Union-Only Group Waiver Plans
(800- Series)
DESIGNATION OF APPLICATION AS “800 SERIES” EGWP ONLY (NO INDIVIDUAL PLANS
WILL BE OFFERED)
Checking the box below is optional. Only check the box below if you are applying to only offer
“800 series” plans under this contract (no plans to individual beneficiaries will be offered). Do
not check the box below if you intend to offer plans to individual beneficiaries and “800 series”
plans under this contract number.
I am hereby designating this application as one which will only offer “800 series” plans. No
plans will be offered to individual Medicare beneficiaries under this contract number.
{Entity MUST complete if it is applying to only offer “800 series” EGWPs (no plans will be
offered to individual Medicare beneficiaries under this contract number).}
EGWP Attestation for Contract
1. EGWP SERVICE AREA & PHARMACY ACCESS REQUIREMENTS
PDP Sponsor Applicants may provide coverage to employer group members wherever they
reside (i.e., nationwide). However, in order to provide coverage to retirees wherever they
reside, PDP Sponsor Applicants must set their service areas to include all areas where retirees
may reside during the plan year (i.e., set national service areas).
New PDP Sponsors Offering Individual and “800 Series” Plans – Pharmacy Access:
PDP Sponsors will not initially be required to have retail and other pharmacy networks in place for
those designated EGWP service areas outside of their individual plan service areas. However, in
accordance with employer group waiver pharmacy access policy, pharmacy access sufficient to
meet the needs of enrollees must be in place once the PDP Sponsor enrolls members of an
employer or union group residing in particular geographic locations outside of its individual plan
service area.
New PDP Sponsors Only Offering “800 Series” Plans – Pharmacy Access:
PDP Sponsors only offering “800 series” plans (i.e., no plans will be offered to individual Medicare
beneficiaries under this contract number) will be required to submit retail and other pharmacy
access information (mail order, home infusion, long-term care, I/T/U) for the entire defined EGWP
service area during the application process and demonstrate sufficient access in these areas in
accordance with employer group waiver pharmacy access policy.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union-only
group waiver plans in association with my organization’s Prescription Drug Plan Contract with
CMS. I have read, understand, and agree to comply with the above statement about service
areas and pharmacy access. If I need further information, I will contact one of the individuals
listed in the instructions for this application.
{Entity MUST complete for a complete application.}

2. CERTIFICATION
This appendix, along with the underlying solicitation to which it is appended, comprises the
entire “800 series” EGWP application for PDP Sponsor. All provisions of the solicitation apply to
all employer/union-only group waiver plan benefit packages offered by PDP Sponsor except
where the provisions are specifically modified and/or superseded by particular employer/uniononly group waiver guidance, including those waivers/modifications set forth below (specific
sections of the solicitation that have been waived or modified for new PDP Sponsor Applicants
are noted in parentheses).
For existing PDP Sponsors, this appendix comprises the entire “800 series” EGWP application
for PDP Sponsor. All provisions of the PDP Sponsor’s existing contract with CMS apply to all
employer/union-group waiver plan benefit packages offered by PDP Sponsor except where the
provisions are specifically modified and/or superseded by particular employer/union-only group
waiver guidance, including those waivers/modifications set forth below.
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union-only group waiver (“800 series”)
prescription drug plans (PDPs) and agrees to be subject to and comply with all CMS
employer/union-only group waiver guidance.
2) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows
PDP Sponsors to offer employer/union-only group waiver plan benefit packages without
offering plans to individual beneficiaries, Applicant must complete the underlying solicitation
in addition to this appendix.
3) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows
PDP Sponsors to offer employer/union-only group waiver plan benefit packages without
offering plans to individual beneficiaries, Applicant must be licensed in at least one state.
4) Applicant understands and agrees that it is not required to submit a 2022 Part D bid (i.e., bid
pricing tool) to offer its employer/union-only group waiver plans, but it must create plans in
the HPMS by the bid deadline.
5) In order for new PDP Sponsors to be eligible for the CMS employer group waiver that allows
PDP Sponsors to offer employer/union-only group waiver plan benefit packages without
offering plans to individual beneficiaries, Applicant understands and agrees that as part of its
completion of the solicitation, it submits retail pharmacy lists and other pharmacy access
submissions (mail order, home infusion, long-term care, I/T/U) required at the time of
application for its entire designated service area.
6) PDP Sponsor applicants applying to offer employer/union-only group waiver plans and plans
to individual beneficiaries understand and agree that they are not initially required to have
networks in place for those designated EGWP service areas outside of their individual plan
service areas or submit retail pharmacy and other pharmacy access submissions required in
the solicitation for its designated EGWP service area. However, access sufficient to meet

the needs of enrollees must be in place once an applicant enrolls members of an employer
or union group residing in particular geographic locations outside of its individual plan
service area.
7) In order to be eligible for the CMS retail pharmacy access waiver of 42 CFR §423.120(a)(1),
Applicant attests that its retail pharmacy network is sufficient to meet the needs of its
enrollees throughout the employer/union-only group waiver PDP’s service area, including
situations involving emergency access, as determined by CMS. Applicant acknowledges
and understands that CMS may review the adequacy of the Applicant’s pharmacy networks
and potentially require expanded access in the event of beneficiary complaints or for other
reasons it determines in order to ensure that the Applicant’s network is sufficient to meet the
needs of its employer group population.
8) Applicant agrees to restrict enrollment in its employer/union-only group waiver PDPs to
those Part D eligible individuals eligible for the employer’s/union’s employment-based retiree
prescription drug coverage.
9) Applicant understands that its employer/union-only group waiver PDPs are not included in
the processes for auto-enrollment (for full-dual eligible beneficiaries) or facilitated enrollment
(for other low income subsidy eligible beneficiaries).
10) Applicant understands that its employer/union-only group waiver plans are not subject to the
requirements contained in 42 CFR §423.48 to submit information to CMS, including the
requirements to submit information (e.g., pricing and pharmacy network information) to be
publicly reported on www.medicare.gov and the Medicare Plan Finder.
11) Applicant understands that dissemination of materials for its employer/union-only group
waiver PDPs are not subject to the requirements contained in 42 CFR §423.128 to be
submitted for review and approval by CMS prior to use. However, Applicant agrees to
submit these materials to CMS at the time of use in accordance with the procedures outlined
in Chapter 12 of the Prescription Drug Benefit Manual. Applicant also understands CMS
reserves the right to review these materials in the event of beneficiary complaints or for any
other reason it determines to ensure the information accurately and adequately informs
Medicare beneficiaries about their rights and obligations under the plan.
12) Applicant understands that its employer/union-only group waiver PDPs is not subject to the
requirements regarding the timing for issuance of certain dissemination materials, such as
the Annual Notice of Change/ Evidence of Coverage (ANOC/EOC), Summary of Benefits
(SB), Formulary, and LIS rider when an employer’s or union’s open enrollment period does
not correspond to Medicare’s Annual Coordinated Election Period. For these employers
and unions, the timing for issuance of the above dissemination materials should be
appropriately based on the employer/union sponsor’s open enrollment period. For example,
the Annual Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits
(SB), LIS rider, and Formulary are required to be received by beneficiaries no later than 15
days before the beginning of the employer/union group health plan’s open enrollment
period. The timing for other dissemination materials that are based on the start of the
Medicare plan (i.e., calendar) year should be appropriately based on the employer/union
sponsor’s plan year.
13) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
not apply to its employer/union-only group waiver PDPs when the employer/union sponsor is

subject to alternative disclosure requirements (e.g., the Employee Retirement Income
Security Act of 1974 (“ERISA”)) and complies with such alternative requirements. Applicant
complies with the requirements for this waiver contained in employer/union-only group
waiver guidance, including those requirements contained in Chapter 12 of the Prescription
Drug Benefit Manual.
14) Applicant understands that its employer/union-only group waiver plans is not subject to the
Part D beneficiary customer service call center hours and call center performance
requirements. Applicant ensures that a sufficient mechanism is available to respond to
beneficiary inquiries and provides customer service call center services to these members
during normal business hours. However, CMS may review the adequacy of these call
center hours and potentially require expanded beneficiary customer service call center
hours in the event of beneficiary complaints or for other reasons in order to ensure that the
entity’s customer service call center hours are sufficient to meet the needs of its enrollee
population.
15) Applicant understands that CMS has waived the requirement that the employer/union-only
group waiver plans must provide beneficiaries the option to pay their premium through
Social Security withholding. Thus, the premium withhold option is not available for enrollees
in Applicant’s employer/union-only group waiver plans.
16) This Certification is deemed to incorporate any changes that are required by statute to be
implemented during the term of the contract, and any regulations and policies implementing
or interpreting such statutory provisions.
17) I have read the contents of the completed application and the information contained herein
is true, correct, and complete. If I become aware that any information in this application is
not true, correct, or complete, I agree to notify CMS immediately and in writing.
18) I authorize CMS to verify the information contained herein. I agree to notify CMS in writing
of any changes that may jeopardize my ability to meet the qualifications stated in this
application prior to such change or within 30 days of the effective date of such change. I
understand that such a change may result in termination of the approval.
19) I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or
falsification of any information contained in this application or contained in any
communication supplying information to CMS to complete or clarify this application may be
punishable by criminal, civil, or other administrative actions including revocation of approval,
fines, and/or imprisonment under Federal law.
20) I acknowledge that I am aware that there is operational policy guidance, including the
forthcoming Call Letter, relevant to this application that is posted on the CMS website and
that it is continually updated. My organization will comply with such guidance should it be
approved for a Part D contract.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union-only
group waiver plans (“800 series” EGWPs) in association with my organization’s PDP Contract
with CMS. I have read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}

{Entity MUST create 800-series PBPs during plan creation and designate EGWP service areas.}

APPENDIX IV – Employer Direct Contract MA-PD Attestations
1. EGWP SERVICE AREA & PHARMACY ACCESS REQUIREMENTS
In general, Part D plans can only cover beneficiaries in the service areas in which they are licensed
and approved by CMS to offer benefits. CMS has waived this requirement for Direct Contract MAPD Sponsors. Direct Contract MA-PD Sponsors can extend coverage to all of their retirees,
regardless of whether they reside in one or more MA regions in the nation. In order to provide
coverage to retirees wherever they reside, Direct Contract MA-PD Sponsors must set their service
areas to include all areas where retirees may reside during the plan year. Applicants are required
to submit retail and other pharmacy access information (mail order, home infusion, long-term care,
I/T/U) for the entire defined service area during the application process and demonstrate sufficient
access in these areas in accordance with employer group waiver pharmacy access policy.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union
Direct Contract MA-PD. I have read, understand, and agree to comply with the above
statement about service areas and pharmacy access. If I need further information, I will contact
one of the individuals listed in the instructions for this application.
{Entity MUST complete for a complete application.}
2. CERTIFICATION
All provisions of the underlying solicitation apply to all plan benefit packages offered by the
Direct Contract MA-PD except where the provisions are specifically modified and/or superseded
by particular employer/union-only group waiver guidance, including those waivers/modifications
set forth below (specific sections of the underlying application that have been waived or
modified for new Direct Contract MA-PD Applicants are noted in parentheses).
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union-only Direct Contract Medicare Advantage
Prescription Drug Plans and agrees to be subject to and comply with all CMS
employer/union-only group waiver guidance.
2) Applicant must complete and submit the application in addition to the Appendix entitled “Part
D Financial Solvency & Capital Adequacy Documentation for Direct Contract MA-PD
Applicants.” All these documents comprise new Direct Contract MA-PD Applicant’s entire
Direct Contract MA-PD application.
3) Applicant agrees to restrict enrollment in its Direct Contract MA-PD plans to those Medicare
eligible individuals eligible for the employer’s/union’s employment-based group coverage.
4) Applicant is not required to submit a 2022 Part D bid (i.e., bid pricing tool) to offer its Direct
Contract MA-PD, but it must create plans in HPMS by the bid deadline.
5) In order to be eligible for the CMS retail pharmacy access waiver of 42 CFR §423.120(a)(1),
Applicant attests that its retail pharmacy network is sufficient to meet the needs of its
enrollees throughout the Direct Contract MA-PD’s service area, including situations involving

emergency access, as determined by CMS. Applicant acknowledges and understands that
CMS reviews the adequacy of the Applicant’s pharmacy networks and may potentially
require expanded access in the event of beneficiary complaints or for other reasons it
determines in order to ensure that the Applicant’s network is sufficient to meet the needs of
its employer group population.
6) Applicant understands and agrees that as part of its completion of the underlying
application, it submits retail pharmacy access and other pharmacy access submissions (mail
order, home infusion, long-term care, I/T/U) required at the time of application for its entire
designated service area.
7) Applicant understands that its Direct Contract MA-PD plans are not included in the
processes for auto-enrollment (for full-dual eligible beneficiaries) or facilitated enrollment (for
other low income subsidy eligible beneficiaries).
8) Applicant understands that CMS has waived the requirement that the Direct Contract MAPD provide beneficiaries the option to pay their premium through Social Security
withholding. Thus, the premium withhold option is not available for enrollees in Applicant’s
Direct Contract MA-PD.
9) Applicant understands that dissemination materials for its Direct Contract MA-PD plans are
not subject to the requirements contained in 42 CFR §423.128 to be submitted for review
and approval by CMS prior to use. However, Applicant agrees to submit these materials to
CMS at the time of use in accordance with the procedures outlined in Chapter 9 of the
Medicare Managed Care Manual (MMCM). Applicant also understands that CMS reserves
the right to review these materials in the event of beneficiary complaints or for any other
reason it determines to ensure the information accurately and adequately informs Medicare
beneficiaries about their rights and obligations under the plan.
10) Applicant understands that its Direct Contract MA-PD is not subject to the requirements
regarding the timing for issuance of certain dissemination materials, such as the Annual
Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB),
Formulary, and LIS rider when an employer’s or union’s open enrollment period does not
correspond to Medicare’s Annual Coordinated Election Period. For these employers and
unions, the timing for issuance of the above dissemination materials should be appropriately
based on the employer/union sponsor’s open enrollment period. For example, the Annual
Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), LIS rider,
and Formulary are required to be received by beneficiaries no later than 15 days before the
beginning of the employer/union group health plan’s open enrollment period. The timing for
other dissemination materials that are based on the start of the Medicare plan (i.e.,
calendar) year should be appropriately based on the employer/union sponsor’s plan year.
11) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
not apply to its Direct Contract MA-PD plans when the employer/union sponsor is subject to
alternative disclosure requirements (e.g., the Employee Retirement Income Security Act of
1974 (“ERISA”)) and complies with such alternative requirements. Applicant complies with
the requirements for this waiver contained in employer/union-only group waiver guidance,
including those requirements contained in Chapter 9 of the MMCM.
12) Applicant understands that its Direct Contract MA-PD plans are not subject to the
requirements contained in 42 CFR §423.48 to submit information to CMS, including the

requirements to submit information (e.g., pricing and pharmacy network information) to be
publicly reported on www.medicare.gov (Medicare Plan Finder).
13) Applicant understands that its Direct Contract MA-PD plans are not subject to the Part D
beneficiary customer service call center hours and call center performance
requirements. Applicant has a sufficient mechanism available to respond to beneficiary
inquiries and provides customer service call center services to these members during
normal business hours. However, CMS may review the adequacy of these call center hours
and potentially require expanded beneficiary customer service call center hours in the event
of beneficiary complaints or for other reasons in order to ensure that the entity’s customer
service call center hours are sufficient to meet the needs of its enrollee population.
14) In general, Part D plan Sponsors must report certain information to CMS, to their enrollees,
and to the general public (such as the cost of their operations and financial statements)
under 42 CFR §423.514(a). Applicant understands that in order to avoid imposing
additional and possibly conflicting public disclosure obligations that would hinder the offering
of employer sponsored group plans, CMS modifies these reporting requirements for Direct
Contract MA-PDs to allow information to be reported to enrollees and to the general public
to the extent required by other law (including ERISA or securities laws), or by contract.
15) This Certification is deemed to incorporate any changes that are required by statute to be
implemented during the term of the contract, and any regulations and policies implementing
or interpreting such statutory provisions.
16) I have read the contents of the completed application and the information contained herein
is true, correct, and complete. If I become aware that any information in this application is
not true, correct, or complete, I agree to notify CMS immediately and in writing.
17) I authorize CMS to verify the information contained herein. I agree to notify CMS in writing
of any changes that may jeopardize my ability to meet the qualifications stated in this
application prior to such change or within 30 days of the effective date of such change. I
understand that such a change may result in termination of the approval.
18) I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or
falsification of any information contained in this application or contained in any
communication supplying information to CMS to complete or clarify this application may be
punishable by criminal, civil, or other administrative actions including revocation of approval,
fines, and/or imprisonment under Federal law.
19) I acknowledge that I am aware that there is operational policy guidance, including the
forthcoming Call Letter, relevant to this application that is posted on the CMS website and
that it is continually updated. My organization will comply with such guidance should it be
approved for a Part D contract.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union
Direct Contract plans in association with my organization’s MA-PD Contract with CMS. I have
read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}

APPENDIX V – Employer Direct Contract PDP Attestation
Direct Contract PDP Attestations for Contract
1. SERVICE AREA & PHARMACY ACCESS REQUIREMENTS
In general, Part D plans can only cover beneficiaries in the service areas in which they are licensed
and approved by CMS to offer benefits. CMS has waived this requirement for Direct Contract PDP
Sponsors. Direct Contract PDP Sponsors can extend coverage to all of their retirees, regardless of
whether they reside in one or more other PDP regions in the nation. In order to provide coverage to
retirees wherever they reside, Direct Contract PDP Sponsors must set their service areas to include
all areas where retirees may reside during the plan year (no mid-year service area expansions
will be permitted). Applicants are required to submit retail and other pharmacy access information
(mail order, home infusion, long-term care, I/T/U) for the entire defined service area during the
application process and demonstrate sufficient access in these areas in accordance with employer
group waiver pharmacy access policy.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union-only
Direct Contract PDP. I have read, understand, and agree to comply with the above statement
about service areas and pharmacy access. If I need further information, I will contact one of the
individuals listed in the instructions for this application.
{Entity MUST complete for a complete application.}
2. CERTIFICATION
All provisions of the underlying solicitation apply to all plan benefit packages offered by PDP
Sponsor except where the provisions are specifically modified and/or superseded by particular
employer/union-only group waiver guidance, including those waivers/modifications set forth
below (specific sections of the underlying application that have been waived or modified for new
PDP Sponsor Applicants are noted in parentheses).
I, the undersigned, certify to the following:
1) Applicant is applying to offer new employer/union Direct Contract prescription drug plans
(PDPs) and agrees to be subject to and comply with all CMS employer/union-only group
waiver guidance.
2) Applicant must complete and submit the underlying application in addition to this Appendix
in its entirety. The 2022 solicitation along with the Appendix entitled “Part D Financial
Solvency & Capital Adequacy Documentation” and this attestation comprise a new Direct
Contract PDP Sponsor Applicant’s entire application.
3) A Part D Sponsor must be organized and licensed under State law as a risk-bearing entity
eligible to offer health insurance or health benefits coverage in each State in which it offers
its coverage (42 CFR §423.504(b)(2)). However, CMS has waived the state licensing
requirement for all Direct Contract PDP Sponsors along with the requirement to be a
nongovernmental legal entity (42 CFR §423.4). As a condition of this waiver, Applicant
meets the financial solvency and capital adequacy standards contained in the Appendix
entitled “Part D Financial Solvency and Capital Adequacy Documentation” of this
application.

4) Applicant is not required to submit a 2020 Part D bid (i.e., bid pricing tool) to offer its Direct
Contract PDP, however it must create plans in HPMS by the bid deadline.
5) Applicant restricts enrollment in its Direct Contract PDP to those Part D eligible individuals
eligible for the Direct Contract PDP’s employment-based retiree prescription drug coverage.
Applicant does not enroll active employees into its Direct Contract PDP.
6) In order to be eligible for the CMS retail pharmacy access waiver of 42 CFR §423.120(a)(1),
Applicant attests that its retail pharmacy network is sufficient to meet the needs of its
enrollees throughout the Direct Contract PDP’s service area, including situations involving
emergency access, as determined by CMS. Applicant acknowledges and understands that
CMS reviews the adequacy of the Applicant’s pharmacy networks and may potentially
require expanded access in the event of beneficiary complaints or for other reasons it
determines in order to ensure that the Applicant’s network is sufficient to meet the needs of
its employer group population.
7) Applicant understands and agrees that as part of its completion of the underlying solicitation,
submits retail pharmacy access and other pharmacy access submissions (mail order, home
infusion, long-term care, I/T/U) required at the time of application in Section 3.4 for its entire
designated service area.
8) Applicant understands that its Direct Contract PDP is not included in the processes for autoenrollment (for full-dual eligible beneficiaries) or facilitated enrollment (for other low income
subsidy eligible beneficiaries).
9) Applicant understands that CMS has waived the requirement that the Direct Contract PDP
provide beneficiaries the option to pay their premium through Social Security withholding.
Thus, the premium withhold option is not available for enrollees in Applicant’s Direct
Contract PDP.
10) Applicant understands that dissemination materials for its Direct Contract PDP are not
subject to the requirements contained in 42 CFR §423.128 to be submitted for review and
approval by CMS prior to use. However, Applicant agrees to submit these materials to CMS
at the time of use in accordance with the procedures outlined in Chapter 12 of the
Prescription Drug Benefit Manual. Applicant also understands that CMS reserves the right
to review these materials in the event of beneficiary complaints or for any other reason it
determines to ensure the information accurately and adequately informs Medicare
beneficiaries about their rights and obligations under the plan.
11) Applicant understands that its Direct Contract PDP is not subject to the requirements
regarding the timing for issuance of certain dissemination materials, such as the Annual
Notice of Change/ Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB),
Formulary, and LIS rider when an employer’s or union’s open enrollment period does not
correspond to Medicare’s Annual Coordinated Election Period. For these employers and
unions, the timing for issuance of the above dissemination materials should be appropriately
based on the employer/union sponsor’s open enrollment period. For example, the Annual
Notice of Change/Evidence of Coverage (ANOC/EOC), Summary of Benefits (SB), LIS rider,
and Formulary are required to be received by beneficiaries no later than 15 days before the
beginning of the employer/union group health plan’s open enrollment period. The timing for

other dissemination materials that are based on the start of the Medicare plan (i.e.,
calendar) year should be appropriately based on the employer/union sponsor’s plan year.
12) Applicant understands that the dissemination requirements set forth in 42 CFR §423.128 do
not apply to its Direct Contract PDP when the employer/union sponsor is subject to
alternative disclosure requirements (e.g., the Employee Retirement Income Security Act of
1974 (“ERISA”)) and complies with such alternative requirements. Applicant complies with
the requirements for this waiver contained in employer/union-only group waiver guidance,
including those requirements contained in Chapter 12 of the Prescription Drug Benefit
Manual.
13) Applicant understands that its Direct Contract PDP is not subject to the requirements
contained in 42 CFR §423.48 to submit information to CMS, including the requirements to
submit information (e.g., pricing and pharmacy network information) to be publicly reported
on www.medicare.gov and the Medicare Plan Finder.
14) Applicant understands that its Direct Contract PDP is not subject to the Part D beneficiary
customer service call center hours and call center performance requirements. Applicant has
a sufficient mechanism available to respond to beneficiary inquiries and provides customer
service call center services to these members during normal business hours. However,
CMS may review the adequacy of these call center hours and potentially require expanded
beneficiary customer service call center hours in the event of beneficiary complaints or for
other reasons in order to ensure that the entity’s customer service call center hours are
sufficient to meet the needs of its enrollee population.
15) Applicant understands that the management and operations requirements of 42 CFR
§423.504(b)(4)(i)-(iii) are waived if the employer or union (or to the extent applicable, the
business associate with which it contracts for prescription drug benefit services) is subject to
ERISA fiduciary requirements or similar state or federal law standards. However, Applicant
understands that it (or its business associates) are not relieved from the record retention
standards applicable to other Part D Sponsors set forth in 42 CFR §423.505(d).
16) In general, Part D plan Sponsors must report certain information to CMS, to their enrollees,
and to the general public (such as the cost of their operations and financial statements)
under 42 CFR §423.514(a). Applicant understands that in order to avoid imposing
additional and possibly conflicting public disclosure obligations that would hinder the offering
of employer sponsored group plans, CMS modifies these reporting requirements for Direct
Contract PDPs to allow information to be reported to enrollees and to the general public to
the extent required by other law (including ERISA or securities laws), or by contract.
17) This Certification is deemed to incorporate any changes that are required by statute to be
implemented during the term of the contract, and any regulations and policies implementing
or interpreting such statutory provisions.
18) I have read the contents of the completed application and the information contained herein
is true, correct, and complete. If I become aware that any information in this application is
not true, correct, or complete, I agree to notify CMS immediately and in writing.
19) I authorize CMS to verify the information contained herein. I agree to notify CMS in writing
of any changes that may jeopardize my ability to meet the qualifications stated in this

application prior to such change or within 30 days of the effective date of such change. I
understand that such a change may result in termination of the approval.
20) I understand that in accordance with 18 U.S.C. §1001, any omission, misrepresentation or
falsification of any information contained in this application or contained in any
communication supplying information to CMS to complete or clarify this application may be
punishable by criminal, civil, or other administrative actions including revocation of approval,
fines, and/or imprisonment under Federal law.
21) I acknowledge that I am aware that there is operational policy guidance, including the
forthcoming Call Letter, relevant to this application that is posted on the CMS website and
that it is continually updated. My organization will comply with such guidance should it be
approved for a Part D contract.
I certify that I am an authorized representative, officer, chief executive officer, or general
partner of the business organization that is applying for qualification to offer employer/union-only
Direct Contract plans in association with my organization’s PDP Contract with CMS. I have
read and agree to comply with the above certifications.
{Entity MUST check box for a complete application.}

APPENDIX VI – Part D Financial Solvency & Capital Adequacy
Documentation
(For Direct PDP Contract applicants only)
Background and Instructions:
A PDP Sponsor generally must be licensed by at least one state as a risk-bearing entity (42
CFR §423.401(a)(1)). CMS has waived the requirement for Direct Contract PDP Sponsors.
Direct Contract PDP Sponsors are not required to be licensed, but must meet CMS Part D
financial solvency and capital adequacy requirements. Each Direct Contract PDP Sponsor
Applicant must demonstrate that it meets the requirements set forth in this Appendix and
provide all required information set forth below. CMS may in its discretion approve, on a caseby-case basis, waivers of such requirements upon a demonstration from the Direct Contract
PDP Sponsor Applicant that its fiscal soundness is commensurate with its financial risk and that
through other means the entity can assure that claims for benefits paid for by CMS and
beneficiaries will be covered. In all cases, CMS requires that the employer’s/union’s contracts
and sub-contracts provide beneficiary hold harmless provisions.
The information required in this Appendix must be submitted electronically through HPMS as a
supporting documentation upload to the Licensure and Solvency section of the Part D
supporting file section in accordance with the instructions contained in this application.

I. EMPLOYER/UNION ORGANIZATIONAL INFORMATION
A. Complete the information below.
Organization’s Full Legal Name:
Full Address of Your Organization’s Headquarters (Street, City, State, Zip):

Type for Entity (place a checkmark in all applicable boxes):
Employer
Fund established by one or more employers or labor organizations
Union
Government
Church Group
Publicly-Traded Corporation
Privately-Held Corporation

Other (list type)
Name of Your Organization’s Parent Organization (if any):
Is Applicant Subject to ERISA? (Y or N)
Tax Status:
For Profit
Not-For-Profit
State in which your organization is incorporated or otherwise organized to do business:

B. Summary Description
Briefly describe the organization in terms of its history and its present operations. Cite significant
aspects of its current financial, general management, and health services delivery activities.
Please include the following:
1. The extent of the current Medicare population served by the Applicant, if any, and the
maximum number of Medicare beneficiaries that could be served as a Direct Contract
PDP.
2. The manner in which benefits are currently provided to the current Medicare population
served by the Applicant, if any, the number of beneficiaries in each employer sponsored
group option currently made available by the Applicant and how these options are
currently funded (self-funded or fully insured).
3. The current benefit design for each of the options described in B above, including
premium contributions made by the employer and/or the retiree, deductible, copayments, or co-insurance, etc. (Applicant may attach a summary plan description of its
benefits or other relevant materials describing these benefits.)
4. Information about other Medicare contracts held by the Applicant, (e.g., 1876, fee for
service, PPO, etc.). Provide the names and contact information for all CMS personnel
with whom Applicant works on their other Medicare contract(s).
5. The factors that are most important to Applicant in considering to apply to become a
Direct Contract PDP for its retirees and how becoming a Direct Contract PDP will benefit
the Applicant and its retirees.
C. If the Applicant is a state agency, labor organization, or a trust established by one or
more employers or labor organizations, Applicant must provide the required
information listed below:
1. State Agencies:
If Applicant is a state agency, instrumentality or subdivision, please provide the
relationship between the entity that is named as the Direct Contract PDP Applicant and

the state or commonwealth with respect to which the Direct Contract PDP Applicant is
an agency, instrumentality or subdivision. Also, Applicant must provide the source of
Applicant’s revenues, including whether applicant receives appropriations and/or has the
authority to issue debt.
2. Labor Organizations:
If Applicant is a labor organization including a fund or trust, please provide the
relationship (if any) between Applicant and any other related labor organizations such as
regional, local or international unions, or welfare funds sponsored by such related labor
organizations. If Applicant is a jointly trusteed Taft-Hartley fund, please include the
names and titles of labor-appointed and management-appointed trustees.
3. Trusts:
If Applicant is a trust, such as a voluntary employee beneficiary association under
section 501(c)(9) of the Internal Revenue Code, please provide the names of the
individual trustees and the bank, trust company or other financial institution that has
custody of Applicant’s assets.
D. Policymaking Body (42 CFR §423.504(b)(4)(i)-(iii)
In general, an entity seeking to contract with CMS as a Direct Contract PDP Sponsor must have
policymaking bodies exercising oversight and control to ensure actions are in the best interest of
the organization and its enrollees, appropriate personnel and systems relating to medical
services, administration and management, and an executive manager whose appointment and
removal are under the control of the policymaking body.
An employer or union directly contracting with CMS as a Direct Contract PDP Sponsor may be
subject to other, potentially different standards governing its management and operations, such
as ERISA fiduciary requirements, state law standards, and certain oversight standards created
under the Sarbanes-Oxley Act. In most cases, they will also contract with outside vendors (i.e.,
business associates) to provide health benefit plan services. To reflect these issues and avoid
imposing additional (and potentially conflicting) government oversight that may hinder
employers and unions from considering applying to offer Direct Contract PDPs, the
management and operations requirements under 42 CFR §423.504(b)(4)(i)-(iii) are waived if the
employer or union (or to the extent applicable, the business associate with which it contracts for
health benefit plan services) is subject to ERISA fiduciary requirements or similar state or
federal laws and standards. However, such entities (or their business associates) are not
relieved from the record retention standards applicable to other PDP Sponsors. In accordance
with the terms of this waiver, please provide the following information:
1. List the members of the organization's policymaking body (name, position, address,
telephone number, occupation, term of office and term expiration date). Indicate
whether any of the members are employees of the Applicant.
2. If the Applicant is a line of business versus a legal entity, does the Board of Directors of
the corporation serve as the policymaking body of the organization? If not, describe the
policymaking body and its relationship to the corporate Board.

3. Does the Federal Government or a State regulate the composition of the policymaking
body? If yes, please identify all Federal and State regulations that govern your
policymaking body (e.g., ERISA).

II. FINANCIAL DOCUMENTATION
A. Minimum Net Worth: $1.5 Million - Documentation of Minimum Net Worth
The Direct Contract PDP Applicant must demonstrate financial solvency through furnishing two
years of independently audited financial statements to CMS. If the Direct Contract PDP
Applicant has not been in operation at least twelve months, it may choose to: 1) obtain
independently audited financial statements for a shorter time period; or 2) demonstrate that it
has the minimum net worth through presentation of un-audited financial statements that contain
sufficient detail to allow CMS to verify the validity of the financial presentation. The un-audited
financial statement must be accompanied by an actuarial opinion from a qualified actuary
regarding the assumptions and methods used in determining loss reserves, actuarial liabilities
and related items.
A “qualified actuary” for purposes of this application means a member in good standing of the
American Academy of Actuaries, a person recognized by the Academy as qualified for
membership, or a person who has otherwise demonstrated competency in the field of actuarial
science and is satisfactory to CMS.
If the Direct Contract PDP Applicant’s auditor is not one of the 10 largest national accounting
firms in accordance with the list of the 100 largest public accounting firms published by the CCH
Public Accounting Report, the Applicant should enclose proof of the auditor’s good standing
from the relevant state board of accountancy.
B. Liquidity
The Direct Contract PDP Applicant must have sufficient cash flow to meet its financial
obligations as they become due. The amount of the minimum net worth requirement to be met
by cash or cash equivalents is $750,000. Cash equivalents are short-term highly liquid
investments that can be readily converted to cash. To be classified as cash equivalents,
investments must have a maturity date not longer than 3 months from the date of purchase.
1. In determining the ability of a Direct Contract PDP Applicant to meet this requirement,
CMS will consider the following:
a) The timeliness of payment,
b) The extent to which the current ratio is maintained at 1:1 or greater, or
there is a change in the current ratio over a period of time; and

whether

c) The availability of outside financial resources.
2. CMS may apply the following corresponding corrective remedies:
a) If a PDP Sponsor fails to pay obligations as they become due, CMS will require the
PDP Sponsor to initiate corrective action to pay all overdue obligations.

b) CMS may require the PDP Sponsor to initiate corrective action if any of the
following are evident:
(i) The current ratio declines significantly; or
(ii) A continued downward trend in the current ratio. The corrective action may
include a change in the distribution of assets, a reduction of liabilities, or
alternative arrangements to secure additional funding to restore the current ratio
to at least 1:1.
c) If there is a change in the availability of outside resources, CMS will require the PDP
Sponsor to obtain funding from alternative financial resources.
C. Methods of Accounting
A Direct Contract PDP Applicant generally must use the standards of Generally Accepted
Accounting Principles (GAAP). Generally Accepted Accounting Principles (GAAP) are those
accounting principles or practices prescribed or permitted by the Financial Accounting
Standards Board. However, a Direct Contract PDP Sponsor whose audited financial statements
are prepared using accounting principles or practices other than GAAP, such as a governmental
entity that reports in accordance with the principles promulgated by the Governmental
Accounting Standards Board (GASB), may utilize such alternative standard.
D. Bonding and Insurance
A Direct Contract PDP Applicant may request a waiver in writing of the bonding and/or
insurance requirements set forth at 42 CFR §423.504(b)(4)(iv) and (v). Relevant considerations
will include demonstration that either or both of the foregoing requirements are unnecessary
based on the entity’s individualized circumstances, including maintenance of similar coverage
pursuant to other law, such as the bonding requirement at ERISA Section 412.
E. Additional Information
A Direct Contract PDP Applicant must furnish the following financial information to CMS to the
extent applicable:
1. Self-Insurance/Self-Funding: If the Direct Contract PDP Applicant’s health plan(s)
are self-insured or self-funded, it must forward proof of stop-loss coverage (if any)
through copies of policy declarations.
2. Trust: If the Direct Contract PDP Applicant maintains one or more trusts with respect to
its health plan(s), a copy of the trust documents, and if the trust is intended to meet the
requirements of Section 501(c)(9) of the Internal Revenue Code, the most recent IRS
approval letter.
3. Forms 5500 and M-1: The two most recent annual reports on Forms 5500 and M-1 (to
the extent applicable) for the Direct Contract PDP Applicant’s health plans that cover
prescription drugs for retirees that are Part D eligible individuals.
4. ERISA Section 411(a) Attestation: Each applicant (including an applicant that is
exempt from ERISA) must provide a signed attestation that no person serves as a

fiduciary, administrator, trustee, custodian, counsel, agent, employee, consultant,
adviser or in any capacity that involves decision-making authority, custody, or control of
the assets or property of any employee benefit plan sponsored by the Direct Contract
PDP Applicant if he or she has been convicted of, or has been imprisoned as a result of
his or her conviction of, one of the felonies set forth in ERISA Section 411(a), for 13
years after such conviction or imprisonment (whichever is later).
5. Defined Benefit Pension Plan: If the Direct Contract PDP Applicant sponsors one or
more defined benefit pension plans (within the meaning of ERISA Section 3(35)) that is
subject to the requirements of Title IV of ERISA, the latest actuarial report for each such
plan.
6. Multi-Employer Pension Plan: If the Direct Contract PDP Applicant is a contributing
employer with respect to one or more multi-employer pension plans within the meaning
of ERISA section 3(37), the latest estimate of contingent withdrawal liability.
7. Tax-Exempt Applicants Only: A copy of the most recent IRS tax-exemption.

III. INSOLVENCY REQUIREMENTS
A. Hold Harmless and Continuation of Coverage/Benefits
A Direct Contract PDP Applicant shall be subject to the same hold harmless and continuation of
coverage/benefit requirements as Medicare Advantage contractors.
B. Insolvency Deposit
A Direct Contract PDP Applicant generally must forward confirmation of its establishment and
maintenance of an insolvency deposit of at least $100,000, to be held in accordance with CMS
requirements by a qualified U.S. Financial Institution. A “qualified U.S. financial institution”
means an institution that:
1. Is organized or (in the case of a U.S. office of a foreign banking organization) licensed
under the laws of the United States or any state thereof; and
2. Is regulated, supervised, and examined by the U.S. Federal or State authorities having
regulatory authority over banks and trust companies.
A Direct Contract PDP Applicant may request a waiver in writing of this requirement.

IV. GUARANTEES (only applies to an Applicant that utilizes a Guarantor)
A. General Policy
A Direct Contract PDP Applicant, or the legal entity of which the Direct Contract PDP Applicant
is a component, may apply to CMS to use the financial resources of a Guarantor for the purpose
of meeting the requirements of a Direct Contract PDP Applicant set forth above. CMS has the
sole discretion to approve or deny the use of a Guarantor.
B. Request to Use a Guarantor

To apply to use the financial resources of a Guarantor, a Direct Contract PDP Applicant must
submit to CMS:
1. Documentation that the Guarantor meets the requirements for a Guarantor under
paragraph (C) of this section; and
2. The Guarantor's independently audited financial statements for the current year-to-date
and for the two most recent fiscal years. The financial statements must include the
Guarantor's balance sheets, profit and loss statements, and cash flow statements.
C. Requirements for Guarantor
To serve as a Guarantor, an organization must meet the following requirements:
1. Is a legal entity authorized to conduct business within a State of the United States.
2. Not be under Federal or State bankruptcy or rehabilitation proceedings.
3. Have a net worth (not including other guarantees, intangibles and restricted reserves)
equal to three times the amount of the PDP Sponsor guarantee.
4. If a State insurance commissioner or other State official with authority for risk-bearing
entities regulates the Guarantor, it must meet the net worth requirement in Section II.A
above with all guarantees and all investments in and loans to organizations covered by
guarantees excluded from its assets.
5. If the Guarantor is not regulated by a State insurance commissioner or other similar
State official, it must meet the net worth requirement in Section II.A above with all
guarantees and all investments in and loans to organizations covered by a guarantee
and to related parties (subsidiaries and affiliates) excluded from its assets.
D. Guarantee Document
If the guarantee request is approved, a Direct Contract PDP Applicant must submit to CMS a
written guarantee document signed by an appropriate Guarantor. The guarantee document
must:
1. State the financial obligation covered by the guarantee;
2. Agree to:
a) Unconditionally fulfill the financial obligation covered by the guarantee; and
b) Not subordinate the guarantee to any other claim on the resources of the Guarantor;
3. Declare that the Guarantor must act on a timely basis, in any case not more than 5
business days, to satisfy the financial obligation covered by the guarantee; and
4. Meet any other conditions as CMS may establish from time to time.

E. Ongoing Guarantee Reporting Requirements
A Direct Contract PDP Sponsor must submit to CMS the current internal financial statements
and annual audited financial statements of the Guarantor according to the schedule, manner,
and form that CMS requires.
F. Modification, Substitution, and Termination of a Guarantee
A Direct Contract PDP Sponsor cannot modify, substitute or terminate a guarantee unless the
Direct Contract PDP Sponsor:
1. Requests CMS's approval at least 90 days before the proposed effective date of the
modification, substitution, or termination;
2. Demonstrates to CMS's satisfaction that the modification, substitution, or termination will
not result in insolvency of the Direct Contract PDP Applicant; and
3. Demonstrates how the Direct Contract PDP Applicant will meet the requirements of this
section.
G. Nullification
If at any time the Guarantor or the guarantee ceases to meet the requirements of this section,
CMS will notify the Direct Contract PDP Sponsor that it ceases to recognize the guarantee
document. In the event of this nullification, a Direct Contract PDP Sponsor must:
1. Meet the applicable requirements of this section within 15 business days; and
2. If required by CMS, meet a portion of the applicable requirements in less than the 15
business days in paragraph (G.1.) of this section.

V. ONGOING REPORTING REQUIREMENTS
An approved Direct Contract PDP Applicant is required to update financial information set forth
in Sections II and III above to CMS on an ongoing basis. The schedule, manner, and form of
reporting will be in accordance with CMS requirements.

APPENDIX VII – Federal Waiver of State Licensure
Only if applying to request a federal waiver of state licensure requirement for
Prescription Drug Plan then download, complete and upload into HPMS the following
form:
Application to Request Federal Waiver of State Licensure Requirement for
Prescription Drug Plan (PDP)
I. Complete the information below.
Contract#
Full Legal Corporate Name:
D.B.A:
Full Address of Corporation (Street, City, State, Zip – No Post Office Boxes):

Corporation Telephone Number:
Corporation Fax Number:
Contact Person Name:
Contact Person Title:
Contact Person Address (Street, City, State, Zip – No Post Office Boxes):

Contact Person Direct Telephone Number:

Contact Person Fax Number:
Contact Person Email Address:

II. Request
I, on behalf of the legal entity identified in Section A, above, hereby request that the
Secretary of Health and Human Services, pursuant to the authority granted under
section 1855(a)(2) and section 1860D-12(c) of the Social Security Act, grant a waiver of
the requirement that our organization be licensed under (Name of State or for Regional
Plan Waiver, States)
State laws as a risk-bearing entity eligible to
sponsor prescription drug benefits coverage.
III. Certification
The undersigned officer has read this completed request for federal waiver form and
does hereby declare that the facts, representations, and statements made in this form
together with any attached information are true and complete to the best of my
knowledge, information, and belief. The information herein declared by me represents
matters about which I am competent, qualified, and authorized to represent the
corporation. If any events, including the passage of time, should occur that materially
change any of the answers to this request for federal waiver, the corporation agrees to
notify the Centers for Medicare & Medicaid Services immediately.
Corporate Name:
Date:
By:
Print Name:
Title:
Witness/Attest:
IV. Instructions for completing the cover sheet of licensure waiver application
Section A

Contract #

•

Enter the corporate name

•

Enter the name under which your PDP will do business (D.B.A)

•

Enter the street address, telephone number and facsimile number of the Corporation
at its corporate headquarters

•

Enter the name, title, telephone number, fax number, and email address of the main
contact person

Section B
•

Indicate the State for which you are requesting a waiver or the States for which you
are requesting a Regional Plan Waiver

Section C
•

Have a duly appointed corporate officer sign and date this form in the presence of a
witness

If you have any questions regarding this form please contact:
Joseph Millstone
410-786-2976
Instructions Follow
Supporting Documentation for Request of Federal Waiver of State Licensure
Requirement for Prescription Drug Plan (PDP) Sponsors
Complete Sections II and IV
I. Background and Purpose
This waiver request form is for use by Applicants who wish to enter into a contract with
the Centers for Medicare & Medicaid Services (CMS) to become Prescription Drug Plan
(PDP) sponsors and provide prescription drug plan benefits to eligible Medicare
beneficiaries without a State risk-bearing entity license.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA)
generally requires Applicants who wish to become PDP sponsors to be licensed under
State law as a risk-bearing entity eligible to offer health insurance or health benefits
coverage in each State in which the Applicant wishes to offer a PDP. However, the
MMA created several exceptions to this State licensure requirement.
In general, there are two types of waivers – both of which are more fully explained in
Section II below. The waivers are: (1) Single State waivers. For these waivers, the
Applicant should submit a separate waiver request for each State, and the waiver is
effective only with respect to the single State. (2) Regional plan waivers. These waivers
may be obtained if an Applicant is licensed in one State in a region and wishes to
receive a waiver for all the other States in the region in which it is not licensed. In this
case, the entity need only submit one waiver request – not one for each and every State
in which it is not licensed.
90

Waiver requests should be submitted to CMS using the criteria described below.
Approval of a waiver request, in no way suggests that the Applicant is approved for a
Medicare contract with CMS. In addition to approval of a waiver request, the Applicant is
required to submit a Medicare contract application that demonstrates that the Applicant
meets the Federal definition of a PDP sponsor and that the prescription drug plan being
offered meets all plan requirements for PDPs.
Waiver Applicants must also comply with CMS standards for financial solvency and
capital adequacy.
II. Waiver Eligibility
The following constitute the waivers available to Applicants. These are the sole grounds
for receiving waivers.
A. Single State Waiver

The Applicant is requesting a single state waiver for the following state:

Please indicate in your response to section IV. (Information to be included in this
request/ the grounds upon which you are requesting a waiver (cover all applicable
areas).)
1. The State has failed to complete action on a licensing application within 90 days

of the date of the State’s receipt of a substantially complete application. 42 CFR
§423. 410(b)(1).
a) In order to apply for a CMS waiver based on the ground that a State did not

act within 90 days of receiving a substantially complete application, the State
must have had a substantially complete application for at least 90 days at the
time the waiver applicant applies to CMS for a waiver. Therefore, in order to
use this ground as a basis for a waiver, any new State license application
must have been received by a State(s) no later than November 1st of the year
prior to submission of the licensure waiver application to CMS. This will insure
that the State had time to confirm “the receipt and completeness of the
application” which is necessary to establish that the 90-day period has been
met. A state’s denial of an application that was not complete does not
create grounds for waiver approval.

2. The State does not have a licensing process in effect with respect to PDP

sponsors. 42 CFR §423.410(c).

3. The State has denied the license application on the basis of one of the following:

a) material requirements, procedures, or standards (other than solvency
requirements) not generally applied by the State to other entities engaged in a
substantially similar business; or
b) the State requires, as a condition of licensure, the Applicant to offer any

product or plan other than a PDP. 42 CFR §423.410(b)(2).

4. The State has denied the licensure application, in whole or in part, for one of the
following reasons:
a) on the basis of the Applicant’s failure to meet solvency requirements that are
different from the solvency standards developed by CMS; or
b) the State has imposed, as a condition of licensing, any documentation or

information requirements relating to solvency that are different from the
information or documentation requirements in the solvency standards
developed by CMS. 42 CFR §423.410(b)(3).

5. The State has denied the licensure application on the basis of grounds other than

those required under Federal law. 42 CFR §423.410(b)(4).

NOTE: To meet the conditions for CMS to grant a state licensure waiver
pursuant to 42 CFR §423.410(b), the waiver applicant must demonstrate that by
the time the waiver application is submitted to CMS, either:
a) The State failed to complete action on the licensing application within 90 days

of the date that the state received a substantially complete application.
States must confirm the receipt and completeness of the application, which is
necessary to establish that the 90-day period has been met; or

b) The State denied the substantially complete license application for one of the

reasons specified in 42 CFR §423.410 (b)(2) through (b)(4), relating to Single
State Waivers.

B. Regional Plan Waivers

The Applicant is State-licensed in the State(s) of
and is applying
for a regional plan waiver in the following region(s):
as
provided under 42 CFR §423.415(a). The Applicant must demonstrate that it submitted
a substantially complete licensure application in each State in the region for which it
does not already have State licensure, except that no such application is necessary if
CMS determines that the State does not have a licensing process for potential PDP
sponsors.
III. Waiver Duration
A. Single State Waiver

The Single State waiver listed in II.A is effective for up to 36 months only and cannot be
renewed unless CMS determines that the State in question does not have a licensing
process in effect with respect to PDP sponsors. Thus, prior to the CMS renewal notice
deadline for the fourth year the PDP sponsor must be State-licensed if it wishes to
continue as a PDP sponsor and receive a contract for the subsequent year, unless CMS
determines that the State in question has chosen not to create a licensing process for
PDP sponsors – in which case the waiver can continue until CMS determines that a
licensure process has been created. Single State waivers automatically terminate if the
PDP sponsor obtains State licensure.
B. Regional Plan Waivers

The Regional Plan waivers expire at the end of the time period the Secretary
determines is appropriate for timely processing of the licensure application, but in no
case will a waiver extend beyond the end of the calendar year.
C. All Waivers

For both Single State and Regional Plan waivers, the waiver will terminate if the
contract with Medicare terminates.
IV. Information to be Included in this Request
While the applicant should provide information concerning each of the following areas,
the specific information and documentation requested below are not necessarily all
inclusive for CMS to approve or deny the request. Applicants should provide any
information and all documentation necessary to substantiate their request.
A. Single-State Waiver:
1. Specify the grounds from section II.A above, upon which you are requesting a

waiver. Provide a narrative of the circumstances leading to the PDP’s eligibility
for a waiver based on one of the grounds listed above. Include information about
the state risk-bearing entity license for which the PDP applied, the application
process that the PDP followed, and any relevant interaction with the state.

2. Provide documentation to substantiate the narrative required in (1). Depending

on the grounds for waiver eligibility, this documentation should include but is not
necessarily limited to the list below:
a) Evidence of state’s failure to act on a licensure application on a timely basis,

including a copy of the dated cover sheet to the application submitted to the
state, state confirmation of the receipt and completeness of the application,
state requests for additional information, and all pertinent correspondence
with the state relating to the status of the application, etc.

b) Evidence of denial of the application based on discriminatory treatment,
including:
(i) Documentation in 2.a above, and,
(ii) Copy of denial letter from the state, copy of “discriminatory” material

requirements (including, state laws and regulation), procedures or
standards to which the PDP was required to comply that are not generally
applicable to other entities engaged in a substantially similar business, a
copy of state licensure requirements that the PDP offer a particular
product or plan in addition to a Medicare plan, and any supplemental
material received from the state explaining its rationale for the denial, etc.

3. PDPs seeking a waiver on the grounds that they are subject to requirements,

procedures and standards not applicable to entities engaged in a “substantially
similar business” must demonstrate through submission of these and other
appropriate materials:
a) The types of entities subject to the different requirements, procedures and

standards are engaged in a “substantially similar business”.

b) The state requirements, procedures and standards imposed on the PDP

entity are not applicable to other “substantially similar business” entities.

4. Evidence of denial of the application based on solvency requirements
a) Documentation in 2.a above, and,
b) Copy of denial letter from the state, copy of state solvency requirements,

demonstration of the difference between state solvency requirements,
procedures and standards and Federal PDP solvency requirements,
procedures and standards, any other state information regarding
documentation, information, and other material requirements, procedures or
standards relating to solvency, or any correspondence detailing the reason
the application was denied, etc.

5. Evidence of State denial of the application based on licensure standards other

than those required by Federal law

a) Documentation in 2.a above, and,
b) Copy of denial letter from the state, memo identifying the state licensure

standards by reference to relevant state law, regulation, or policy guidance
and describing how those standards differ from those required by Federal
law.

6. Provide the name, address and telephone number of all state regulatory officials

involved in the state application and/or denial proceedings.

7. Provide any other information that you believe supports your request for a

waiver.

B. Regional Plan Waivers
1. Evidence of licensure in one state within the region and
2. Copy of the dated cover sheet to the application(s) submitted to the unlicensed

state(s), state confirmation of the receipt and completeness of each application,
state requests for additional information, and all pertinent correspondence with
the state(s) relating to the status of the application, etc. – unless CMS
determines that there is no PDP licensing process in effect in a state.

3. Provide the name, address and telephone number of all state regulatory officials

involved in the state application and/or denial proceedings.

4. Provide any other information that you believe supports your request for a

waiver.

V. Overview of Waiver Request Process
For single-state waivers, section 1860D-12(c) and section 1855(a)(2) of the Act require
the Secretary to grant or deny this waiver request within 60 days after the date the
Secretary determines that a substantially complete application has been filed. Upon
receipt of a waiver request, CMS will review it to determine whether it contains sufficient
information to approve or deny the request. The 60-day review period begins at the time
CMS determines that the application is substantially complete.

APPENDIX VIII – Financial Solvency Documentation for Applicant Not
Licensed as a Risk-bearing Entity in Any State
(For individual market applicants only)
Upload all appropriate documentation in pdf format into HPMS on the Part D Financial Solvency
Upload Page.

I. DOCUMENTATION
A. Documentation of Net Worth - Minimum Net Worth: $1.5 million
At the time of application, the potential PDP Sponsor not licensed in any state must show
evidence of the required minimum net worth. The PDP Sponsor must demonstrate this through
an independently audited financial statement if it has been in operation at least twelve months.
If the organization has not been in operation at least twelve months it may choose to 1) obtain
an independently audited financial statement for a shorter time period; or 2) demonstrate that it
has the minimum net worth through presentation of an unaudited financial statement that
contains sufficient detail that CMS may verify the validity of the financial presentation. The
unaudited financial statement must be accompanied by an actuarial opinion by a qualified
actuary regarding the assumptions and methods used in determining loss reserves, actuarial
liabilities and related items.
A qualified actuary for the purposes of this application means a member in good standing of the
American Academy of Actuaries or a person recognized by the Academy as qualified for
membership, or a person who has otherwise demonstrated competency in the field of actuarial
determination and is satisfactory to CMS.
B. Financial Plan
1. Plan Content and Coverage
At the time of application, the PDP Sponsor must upload in HPMS on the Part D
Financial Solvency Upload page a business plan (with supporting financial projections
and assumptions, satisfactory to CMS), covering the first twelve months of operation
under the Medicare contract and meeting the requirements stated below. If the plan
projects losses, the business plan must cover the period for twelve months past the date
of projected break-even.

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The business plan must include a financial plan with:
a) A detailed marketing plan;
b) Statements of revenue and expense on an accrual basis;
c) A cash flow statement;
d) Balance sheets;
e) The assumptions in support of the financial plan;
f)

If applicable, availability of financial resources to meet projected losses; (if no
projected losses this does not preclude applicant from calculating projected losses
as prescribed by CMS in 2. b. below)and

g) Independent actuarial certification of business plan assumptions and plan feasibility
by a qualified actuary.
2. Funding for Projected Losses
a) Allowable sources of funding:
In the financial plan, the PDP Sponsor must demonstrate that it has the resources
available to meet the projected losses for the time-period to breakeven. Except for
the use of guarantees as provided in section (i) below, letters of credit as provided in
section (ii) below, and other means as provided in section (iii) below, the resources
must be assets on the balance sheet of the PDP Sponsor in a form that is either
cash or is convertible to cash in a timely manner (i.e. cash or cash equivalents),
pursuant to the financial plan.
(i) Guarantees will be acceptable as a resource to meet projected losses under the
conditions detailed in Section III, Guarantees.
(ii) An irrevocable, clean, unconditional, evergreen letter of credit may be used in
place of cash or cash equivalents if prior approval is obtained from CMS. It must
be issued or confirmed by a qualified United States financial institution as defined
in Section II.B, Insolvency, below. The letter of credit shall contain an issue date
and expiration date and shall stipulate that the beneficiary need only draw a sight
draft under the letter of credit and present it to obtain funds and that no other
document need be presented.
(a) “Beneficiary” means the PDP sponsor for whose benefit the credit has been
established and any successor of the PDP sponsor by operation of law. If a
court of law appoints a successor in interest to the named beneficiary, then
the named beneficiary includes the court appointed bankruptcy trustee or
receiver.
(b) The letter of credit also shall indicate that it is not subject to any condition or
qualifications any other agreement, documents or entities.

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(c) CMS must be notified in writing thirty days prior to the expiration without
renewal or the reduction of a proposed or existing letter of credit or
replacement of a letter of credit by one for a reduced amount.
(d) Prior written approval of CMS should be secured by the PDP sponsor of any
form of proposed letter of credit arrangements before it is concluded for
purposes of funding for projected losses.
(iii) If approved by CMS, based on appropriate standards promulgated by CMS, a
PDP sponsor may use the following to fund projected fund losses for periods
after the first year: lines of credit from regulated financial institutions, legally
binding agreements for capital contributions, or other legally binding contracts of
a similar level of reliability.
NOTE: A plan needs to maintain its $1.5 million in net worth to meet the net
worth standard (Section A, above) and may not use any portion of the $1.5
million in net worth to fund the projected losses. Net worth in excess of $1.5
million, which is funded through the forms allowable for meeting projected losses
(i.e., cash, or cash equivalents,) may be counted in the projected losses funding
however the minimum $750,000 liquidity requirement (Section C, below) must
still be met and may not be used to meet the projected losses.
b) Calculation of projected losses:
(i) An applicant that has had state licensure waived must demonstrate that in order
to cover projected losses, the applicant possesses allowable sources of funding
sufficient to cover the greater of:
(a) 7.5 percent of the aggregated projected target amount for a given year
(aggregated projected target amount is calculated by estimating the average
monthly per capita cost of benefits (excluding administrative costs) and
multiplying that amount by member months for a 12 month period), or
(b) Resources to cover 100% of any projected losses, if the business plan
projects losses greater than 7.5% of the aggregated projected target amount.
(ii) The applicant must upload in HPMS with the application, a worksheet calculating
the aggregated projected target amount as defined above.
(iii) Enrollment projections, once submitted to CMS as part of the Applicant’s
originally submitted financial solvency documentation, may be revised only when
accompanied by supporting documentation providing an explanation for the
revision along with a revised financial plan. CMS will not accept revisions made
solely to ensure that the calculation of required funding for projected losses
results in an amount less than or equal to the Applicant’s available financial
resources. Additionally, the Applicant must upload in HPMS an attestation
signed by the CEO, CFO, or an individual designated to sign on his or her behalf
and who reports directly to the officer, describing the basis for the changes in
enrollment projections (e.g., updated Medicare Part D market analysis
information).

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C. Liquidity
The PDP Sponsor must have sufficient cash flow to meet its financial obligations as they
become due. The amount of minimum net worth requirement to be met by cash or cash
equivalents is $750,000. Cash equivalents are short term highly liquid investments that can be
readily converted to cash. To be classified as cash equivalents these investments must have a
maturity date not longer than 3 months from the date of purchase
1. In determining the ability of a PDP Sponsor to meet this requirement, CMS will consider
the following:
a) The timeliness of payment,
b) The extent to which the current ratio is maintained at 1:1 or greater, or whether there
is a change in the current ratio over a period of time, and
c) The availability of outside financial resources.
2. CMS may apply the following corresponding corrective action remedies:
a) If the PDP Sponsor fails to pay obligations as they become due, CMS will require the
PDP Sponsor to initiate corrective action to pay all overdue obligations.
b) CMS may require the PDP Sponsor to initiate corrective action if any of the following
are evident:
(i) The current ratio declines significantly; or
(ii) A continued downward trend in the current ratio. The corrective action may
include a change in the distribution of assets, a reduction of liabilities or
alternative arrangements to secure additional funding to restore the current ratio
to at least 1:1.
3. If there is a change in the availability of the outside resources, CMS will require the PDP
Sponsor to obtain funding from alternative financial resources.
D. Methods of Accounting
1. The PDP Sponsor may use the standards of Generally Accepted Accounting Principles
(GAAP) or it may use the standards of Statutory Accounting Principles (SAP) applicable
to the type of organization it would have been licensed as at the state level if a waiver
were not granted by CMS. Whether GAAP or SAP is utilized however, there are certain
additional differences cited below for waivered PDP Sponsors.
a) Generally Accepted Accounting Principles (GAAP) are those accounting principles or
practices prescribed or permitted by the Financial Accounting Standards Board.
b) Statutory Accounting Principles are those accounting principles or practices
prescribed or permitted by the domiciliary State insurance department in the State in
which the PDP Sponsor operates.

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2. Waivered organizations should note that the maximum period of waiver is limited by
Federal regulation. At such time as the waiver expires, the PDP Sponsor would have to
obtain a risk bearing license.
3. Waivered PDP Sponsors should adjust their balance sheets as follows:
a) Calculation-Assets: The following asset classes will not be admitted as assets:
(i) Good will;
(ii) Acquisition costs;
(iii) Other similar intangible assets.
b) Calculation- Liabilities: Net worth means the excess of total admitted assets over
total liabilities, but the liabilities shall not include fully subordinated debt.
(i) Subordinated debt means an obligation that is owed by an organization, that the
creditor of the obligation, by law, agreement, or otherwise, has a lower
repayment rank in the hierarchy of creditors than another creditor. The creditor
would be entitled to repayment only after all higher ranking creditor’s claims have
been satisfied. A debt is fully subordinated if it has a lower repayment rank than
all other classes of creditors and is payable out of net worth in excess of that
required under Section IA, Net Worth and under Section IC, Liquidity above.
(ii) In order to be considered fully subordinated debt for the purpose of calculating
net worth, the subordinated debt obligation must be a written instrument and
include:
(a) The effective date, amount, interest and parties involved.
(b) The principal sum and/or any interest accrued thereon that are subject to and
subordinate to all other liabilities of the PDP sponsor, and upon dissolution or
liquidation, no payment of any kind shall be made until all other liabilities of
the PDP sponsor have been paid.
(c) The instrument states that the parties agree that the PDP sponsor must
obtain written approval from CMS prior to the payment of interest or
repayment of principal.
E. Financial Indicators and Reporting
1. The PDP Sponsor must upload a Health Blank Form (in the same format as utilized by
the National Association of Insurance Commissioners) to CMS. The portion of the Health
Blank Form submitted to CMS will be limited to the following pages:
a) Jurat Page;
b) Assets;
c) Liabilities, Capital and Surplus;

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d) Statement of Revenue and Expenses;
e) Capital and Surplus Account;
f)

Cash Flow;

g) Actuarial Opinion (the actuarial opinion is required only of annual report filings).
2. In addition, the PDP Sponsor shall submit an annual independently audited financial
statement with management letter.
3. Reporting shall be on the following schedule:
a) Quarterly reporting PDP sponsors shall report within 45 days of the close of a
calendar quarter ending on the last day of March, June and September. No separate
quarterly report shall be required for the final quarter of the year.
b) Annually reporting and quarterly reporting PDP sponsors shall report annually within
120 days of the close of the calendar year i.e. by April 30th or within 10 days of the
receipt of the annual audited financial statement, whichever is earlier.
c) Note: Future frequency of reporting will be both quarterly (first, second, and third
quarters only) and annually to CMS. CMS may choose to initiate monthly reporting
from certain PDP Sponsors who because of their financial status CMS deems may
require additional monitoring.
4. Financial reporting may be the General Accepted Accounting Principles (GAAP) or
under Statutory Accounting Principles (SAP) applicable to similar organizations of similar
type within the state where the organization is based. However, if an organization
chooses to report under GAAP, it may not report under GAAP for a period longer than
36 months unless a state has chosen to not license such organizations.

II. INSOLVENCY
A. Hold Harmless and Continuation of Coverage/Benefits
PDP Sponsors shall be subject to the same hold harmless and continuation of coverage/benefit
requirements as Medicare Advantage contractors.
B. Insolvency Deposit
$100,000 held in accordance with CMS requirements by a qualified U.S. financial Institution. A
qualified U.S. financial institution means an institution that:
1. Is organized or (in the case of a U. S. office of a foreign banking organization) licensed,
under the laws of the United States or any state thereof; and
2. Is regulated, supervised and examined by U. S. Federal or State authorities having
regulatory authority over banks and trust companies.

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III. GUARANTEES
A. General policy.
A PDP Sponsor, or the legal entity of which the PDP Sponsor is a Component, may apply to
CMS to use the financial resources of a Guarantor for the purpose of meeting the requirements
of a PDP Sponsor. CMS has the discretion to approve or deny approval of the use of a
Guarantor.
B. Request to use a Guarantor.
To apply to use the financial resources of a Guarantor, a PDP Sponsor must upload in HPMS:
1. Documentation that the Guarantor meets the requirements for a Guarantor under
paragraph (C) of this section; and
2. The Guarantor's independently audited financial statements for the current year-to-date
and for the two most recent fiscal years. The financial statements must include the
Guarantor's balance sheets, profit and loss statements, and cash flow statements.
C. Requirements for Guarantor.
To serve as a Guarantor, an organization must meet the following requirements:
1. Be a legal entity authorized to conduct business within a State of the United States.
2. Not be under Federal or State bankruptcy or rehabilitation proceedings.
3. Have an adjusted net worth (not including other guarantees, intangibles and restricted
reserves) equal to three times the amount of the PDP Sponsor guarantee.
4. If a State insurance commissioner regulates the Guarantor, or other State official with
authority for risk-bearing entities, it must meet the adjusted net worth requirement in this
document with all guarantees and all investments in and loans to organizations covered
by guarantees excluded from its assets.
5. If the Guarantor is not regulated by a State insurance commissioner, or other similar
State official it must meet the adjusted net worth requirement in this document with all
guarantees and all investments in and loans to organizations covered by a guarantee
and to related parties (subsidiaries and affiliates) excluded from its assets and
determination of adjusted net worth.
D. Guarantee document.
If the guarantee request is approved, a PDP Sponsor must upload in HPMS a written guarantee
document signed by an appropriate Guarantor. The guarantee document must:
1. State the financial obligation covered by the guarantee;
2. Agree to:

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a) Unconditionally fulfill the financial obligation covered by the guarantee; and
b) Not subordinate the guarantee to any other claim on the resources of the Guarantor;
3. Declare that the Guarantor must act on a timely basis, in any case not more than 5
business days, to satisfy the financial obligation covered by the guarantee; and
4. Meet other conditions as CMS may establish from time to time.
E. Reporting requirement.
A PDP Sponsor must submit to CMS the current internal financial statements and annual
audited financial statements of the Guarantor according to the schedule, manner, and form that
CMS requests.
F. Modification, substitution, and termination of a guarantee.
A PDP Sponsor cannot modify, substitute or terminate a guarantee unless the PDP Sponsor:
1. Requests CMS' approval at least 90 days before the proposed effective date of the
modification, substitution, or termination;
2. Demonstrates to CMS' satisfaction that the modification, substitution, or termination will
not result in insolvency of the PDP Sponsor; and
3. Demonstrates how the PDP Sponsor will meet the requirements of this section.
G. Nullification.
If at any time the Guarantor or the guarantee ceases to meet the requirements of this section,
CMS will notify the PDP Sponsor that it ceases to recognize the guarantee document. In the
event of this nullification, a PDP Sponsor must:
1. Meet the applicable requirements of this section within 15 business days; and
2. If required by CMS, meet a portion of the applicable requirements in less than the time
period granted in paragraph (G.1.) of this section.

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APPENDIX IX – Organization Background and Structure
Instructions: Applicants must complete and upload in HPMS the following information.
A. Legal Entity Background
Date Legal Entity Established:
State of Incorporation
(Applicant must upload proof of incorporation, such as articles of incorporation or a
certificate of good standing from the state of incorporation.)
B. Experience of Legal Entity
Date Organization, Its Parent Organization, or a Subsidiary of the Parent Organization
Began Offering Health Insurance or Health Benefits Coverage
Date Organization, Its Parent Organization, or a Subsidiary of the Parent Organization
Began Actively Managing Prescription Drug Benefits for an Organization that Offers
Health Insurance or Health Benefits Coverage, Including:
(a) Authorization, adjudication, and processing of prescription drug claims at the
point of sale;
(b) Administration and tracking of enrollees’ drug benefits in real time, including
automated coordination of benefits with other payers; and
(c) Operation of an enrollee appeals and grievance process.

For New PDP applicants, Number of Covered Lives for Whom Organization Provided
Health Insurance and/or Prescription Drug Coverage in 2021 and 2022:
_________________
C. Management of Legal Entity
Identify the staff (name and title) with legal authority to sign/enter into contracts on
behalf of the legal entity
Identify all owners or members of the board of directors/trustees that were also owners
or members of a board of directors/trustees of an organization that terminated or
nonrenewed its Part C or Part D Contract since January 1, 2020.
D. Parent Organization Information
Name of Parent Organization
Date Parent Organization established
E. Organizational Charts (may be uploaded as separate documents)
Provide an organizational chart of the legal entity’s parent organization, affiliates,
subsidiaries and related entities.
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Provide an organizational chart solely of the internal structure of the legal entity by
department (e.g., marketing, compliance, pharmacy network/contracting, and claims
adjudication). Do not provide the internal structure of the parent organization.
Provide a chart of the relationships between the applicant and its first tier,
downstream, and related entities.
F, Proof of Incorporation
Upload proof of incorporation, such as articles of incorporation or a certificate of good
standing from the state in which the applicant is organized.

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APPENDIX X – Crosswalks of Section 3.1.1E Requirements in
Subcontracts submitted as Attachments to Section 3.1.1
Requirement

Citation

The parties to the contract. If the applicant is not a party to the contract, it
must be identified by name as an entity that will benefit from the services
described in the contract.
The functions to be performed by the first tier, downstream, or related
entity. Describe the reporting requirements the first tier, downstream, or
related entity identified in Section 3.1.1C of the application has to the
applicant. 42 CFR §423.505(i)(4)(i)
Language clearly indicating that the first tier, downstream, or related entity
has agreed to participate in your Medicare Prescription Drug Benefit
program (except for a network pharmacy if the existing contract would allow
participation in this program).
Contains flow-down clauses requiring the first tier, downstream, or related
entity’s activities to be consistent and comply with the Applicant’s
contractual obligations as a Part D sponsor. 42 CFR §423.505(i)(3)(iii)
The payment the parties have agreed that the first tier, downstream,
or related entity will receive for performance under the contract.
Applicants may not redact this information.
Are for a term of at least the one-year contract period for which application
is submitted. Note: Where the contract is for services or products to be
used in preparation for the next contract year’s Part D operations
(marketing, enrollment), the initial term of such contract must include this
period of performance (e.g., contracts for enrollment-related services must
have a term beginning no later than October 15 extending through the full
contract year ending on December 31 of the next year).
Are signed by a representative of each party with legal authority to bind the
entity.
Language obligating the first tier, downstream, or related entity to abide by
all applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
Language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the
confidentiality and security provisions stated in the regulations for the
program at 42 CFR §423.136.

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Requirement

Citation

Language ensuring that the first tier, downstream, or related entity will
make its books and other records available in accordance with 42 CFR
423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these
regulations give HHS, the Comptroller General, or their designees the right
to audit, evaluate and inspect any books, contracts, records, including
medical records and documentation involving transactions related to CMS’
contract with the Part D sponsor and that these rights continue for a period
of 10 years from the final date of the contract period or the date of audit
completion, whichever is later. 42 CFR §423.505
Language stating that the first tier, downstream, or related entity will ensure
that beneficiaries are not held liable for fees that are the responsibility of the
Applicant. 42 CFR §423.505(i)(3)(i)
Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or related
entity, that such activity or responsibility may be revoked if CMS or the Part
D sponsor determines the first tier, downstream, or related entity has not
performed satisfactorily. Note: The contract/administrative services
agreement may include remedies in lieu of revocation to address this
requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity
on an ongoing basis. 42 CFR §423.505(i)(4)(iii)
Language that the Part D sponsor retains the right to approve, suspend, or
terminate any arrangement with a pharmacy if the first tier, downstream, or
related entity will establish the pharmacy network or select pharmacies to
be included in the network. 42 CFR §423.505(i)(5)
Language that if the first tier, downstream, or related entity will establish the
pharmacy network or select pharmacies to be included in the network
contain language that payment to such pharmacies (excluding long-term
care and mail order) shall be issued, mailed, or otherwise transmitted with
respect to all clean claims submitted by or on behalf of pharmacies within
14 days for electronic claims and within 30 days for claims submitted
otherwise. 42 CFR §423.505(i)(3)(vi)
Language that if the first tier, downstream, or related entity will establish the
pharmacy network or select pharmacies to be included in the network and a
prescription drug pricing standard is used for reimbursement, identifies the
source used by the Part D sponsor for the prescription drug pricing
standard of reimbursement. 42 CFR §423.505(i)(3)(viii)(B)

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Requirement

Citation

If the first tier, downstream, or related entity will establish the pharmacy
network or select pharmacies to be included in the network, and the source
for any prescription drug pricing standard is not publicly available, a
provision for disclosing all individual drug prices to be updated to the
applicable pharmacies in advance of their use for reimbursement of claims.
42 CFR §423.505(i)(3)(vii).
If the first tier, downstream, or related entity will establish the pharmacy
network or select pharmacies to be included in the network and a
prescription drug pricing standard is used for reimbursement, a provision
requiring that updates to such a standard occur not less frequently than
once every 7 days beginning with an initial update on January 1 of each
year, to accurately reflect the market price of acquiring the drug. 42 CFR
§423.505(i)(3)(viii)(A)
If the first tier, downstream, or related entity will establish the pharmacy
network or select pharmacies to be included in the network, language
requiring the network pharmacies to submit claims to the Part D sponsor or
first tier, downstream or related entity whenever the membership ID card is
presented or on file at the pharmacy unless the enrollee expressly requests
that a particular claim not be submitted. 42 CFR §423.120(c)(3)
Language that if the first tier, downstream, or related entity will adjudicate
and process claims at the point of sale and/or negotiate with prescription
drug manufacturers and others for rebates, discounts, or other price
concessions on prescription drugs contain language requiring that the first
tier, downstream, or related entity will comply with the reporting
requirements established in 42 CFR §423.514(d) and (e).

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APPENDIX XI – Crosswalk for Retail Pharmacy Access Contracts
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains applicable Section 3.11D requirements AND additional requirements
specific to Pharmacy Access) for each Retail pharmacy contract template submitted
under Section 3.6. Applicants must identify where specifically (i.e., the .pdf page
number) in each contract template the following elements are found.
The provisions listed below must be in all pharmacy contracts. If contracts
reference policies and procedures to with which the pharmacy must comply,
provide the relevant documentation as evidence and cite this documentation
accordingly.
Requirement

Citation

The functions to be performed by the first tier, downstream, or related entity.
Describes the reporting requirements the first tier, downstream, or related
entity identified in Section 3.1.1C of the application has to the Applicant. 42
CFR §423.505(i)(4)(i)
Language obligating the first tier, downstream, or related entity to abide by all
applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
Language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the
confidentiality and security provisions stated in the regulations for the
program at 42 CFR §423.136.
Language ensuring that the first tier, downstream, or related entity will make
its books and other records available in accordance with 42 CFR
423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations
give HHS, the Comptroller General, or their designees the right to audit,
evaluate and inspect any books, contracts, records, including medical
records and documentation involving transactions related to CMS’ contract
with the Part D sponsor and that these rights continue for a period of 10
years from the final date of the contract period or the date of audit
completion, whichever is later. 42 CFR §423.505
Language stating that the first tier, downstream, or related entity will ensure
that beneficiaries are not held liable for fees that are the responsibility of the
Applicant. 42 CFR §423.505(i)(3)(i)

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Requirement

Citation

Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or related
entity, that such activity or responsibility may be revoked if CMS or the Part D
sponsor determines the first tier, downstream, or related entity has not
performed satisfactorily. Note: The contract may include remedies in lieu of
revocation to address this requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor, will
monitor the performance of the first tier, downstream, or related entity on an
ongoing basis. 42 CFR §423.505(i)(4)(iii)
Provisions requiring that payment shall be issued, mailed or otherwise
transmitted with respect to all clean claims submitted by or on behalf of
pharmacies within 14 days for electronic claims and within 30 days for claims
submitted otherwise. 42 CFR §423.505(i)(3)(vi)
For those contracts that use a prescription drug pricing standard for
reimbursement, a provision indicating the source used by the Part D sponsor
for the prescription drug pricing standard of reimbursement. 42 CFR
§423.505(i)(3)(viii)(B)
If the source for any prescription drug pricing standard is not publicly
available, a provision for disclosing all individual drug prices to be updated to
the applicable pharmacies in advance of their use for reimbursement of
claims. 42 CFR §423.505(i)(3)(vii).
For those contracts that use a prescription drug pricing standard for
reimbursement, a provision that updates to such a standard occur not less
frequently than once every 7 days beginning with an initial update on January
1 of each year, to accurately reflect the market price of acquiring the drug.42
CFR §423.505(i)(3)(viii)(A)
Language requiring the network pharmacy to submit claims to the Part D
sponsor or first tier, downstream or related entity whenever the membership
ID card is presented or on file at the pharmacy unless the enrollee expressly
requests that a particular claim not be submitted. 42 CFR §423.120(c)(3)
Provisions governing submitting claims to a real-time claims adjudication
system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain
pharmacies that are allowed to submit claims in the X 12 format that these
may be batch processed.

114

Requirement

Citation

Provisions governing providing Part D enrollees access to negotiated prices
as defined in 42 CFR 423.100. 42 CFR §423.104(g)
Provisions regarding charging/applying the correct cost-sharing amount. 42
CFR §423.104
Provisions governing informing the Part D enrollee at the point of sale (or at
the point of delivery for mail order drugs) of the lowest-priced, generically
equivalent drug, if one exists for the beneficiary's prescription, as well as any
associated differential in price. 42 CFR §423.132

115

APPENDIX XII – Crosswalk for Mail Order Pharmacy Access Contracts
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains applicable Section 3.1.1D requirements AND additional requirements
specific to Pharmacy Access) for each Mail Order pharmacy contract template
submitted under Section 3.8. Applicants must identify where specifically (i.e., the .pdf
page number) in each contract template the following elements are found.
The provisions listed below must be in all pharmacy contracts. If contracts
reference policies and procedures with which the pharmacy must comply,
provide the relevant documentation as evidence and cite this documentation
accordingly.
Requirement

Citation

The functions to be performed by the first tier, downstream, or related entity,
and describes the reporting requirements the first tier, downstream, or
related entity identified in Section 3.1.1C of the application has to the
Applicant. 42 CFR §423.505(i)(4)(i)
Language obligating the first tier, downstream, or related entity to abide by
all applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
Language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the
confidentiality and security provisions stated in the regulations for the
program at 42 CFR §423.136.
Language ensuring that the first tier, downstream, or related entity will make
its books and other records available in accordance with 42 CFR
423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations
give HHS, the Comptroller General, or their designees the right to audit,
evaluate and inspect any books, contracts, records, including medical
records and documentation involving transactions related to CMS’ contract
with the Part D sponsor and that these rights continue for a period of 10
years from the final date of the contract period or the date of audit
completion, whichever is later. 42 CFR §423.505
Language stating that the first tier, downstream, or related entity will ensure
that beneficiaries are not held liable for fees that are the responsibility of the
Applicant. 42 CFR §423.505(i)(3)(i)

116

Requirement

Citation

Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or
related entity, that such activity or responsibility may be revoked if CMS or
the Part D sponsor determines the first tier, downstream, or related entity
has not performed satisfactorily. Note: The contract may include remedies
in lieu of revocation to address this requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity
on an ongoing basis. 42 CFR §423.505(i)(4)(iii)
For those contracts that use a prescription drug pricing standard for
reimbursement, a provision indicating the source used by the Part D
sponsor for the prescription drug pricing standard of reimbursement. 42
CFR §423.505(i)(3)(viii)(B)
If the source for any prescription drug pricing standard is not publicly
available, a provision for disclosing all individual drug prices to be updated
to the applicable pharmacies in advance of their use for reimbursement of
claims. 42 CFR §423.505(i)(3)(vii).
For those contracts that use a prescription drug pricing standard for
reimbursement, a provision that updates to such a standard occur not less
frequently than once every 7 days beginning with an initial update on
January 1 of each year, to accurately reflect the market price of acquiring
the drug.42 CFR §423.505(i)(3)(viii)(A)
Language requiring the network pharmacy to submit claims to the Part D
sponsor or first tier, downstream or related entity whenever the
membership ID card is presented or on file at the pharmacy unless the
enrollee expressly requests that a particular claim not be submitted. 42
CFR §423.120(c)(3)
Provisions governing submitting claims to a real-time claims adjudication
system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain
pharmacies that are allowed to submit claims in the X 12 format that these
may be batch processed.
Provisions governing providing Part D enrollees access to negotiated
prices as defined in 42 CFR 423.100. 42 CFR §423.104(g)
Provisions regarding charging/applying the correct cost-sharing amount. 42
CFR §423.104

117

Requirement

Citation

118

APPENDIX XIII – Crosswalk for Home Infusion Pharmacy Access
Contracts
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains applicable Section 3.1.1D requirements AND additional requirements
specific to Pharmacy Access) for each Home Infusion pharmacy contract template
submitted under Section 3.9. Applicants must identify where specifically (i.e., the .pdf
page number) in each contract template the following elements are found.
The provisions listed below must be in all pharmacy contracts. If contracts
reference policies and procedures with which the pharmacy must comply,
provide the relevant documentation as evidence and cite this documentation
accordingly.
Requirement

Citation

The functions to be performed by the first tier, downstream, or related entity,
and describes the reporting requirements the first tier, downstream, or related
entity identified in Section 3.1.1C of the application has to the Applicant. 42
CFR §423.505(i)(4)(i)
Language obligating the first tier, downstream, or related entity to abide by all
applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
Language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the
confidentiality and security provisions stated in the regulations for the
program at 42 CFR §423.136.
Language ensuring that the first tier, downstream, or related entity will make
its books and other records available in accordance with 42 CFR
423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations
give HHS, the Comptroller General, or their designees the right to audit,
evaluate and inspect any books, contracts, records, including medical
records and documentation involving transactions related to CMS’ contract
with the Part D sponsor and that these rights continue for a period of 10
years from the final date of the contract period or the date of audit
completion, whichever is later. 42 CFR §423.505
Language stating that the first tier, downstream, or related entity will ensure
that beneficiaries are not held liable for fees that are the responsibility of the
Applicant. 42 CFR §423.505(i)(3)(i)

119

Requirement

Citation

Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or related
entity, that such activity or responsibility may be revoked if CMS or the Part D
sponsor determines the first tier, downstream, or related entity has not
performed satisfactorily. Note: The contract may include remedies in lieu of
revocation to address this requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity on
an ongoing basis. 42 CFR §423.505(i)(4)(iii)
Provisions requiring that payment shall be issued, mailed or otherwise
transmitted with respect to all clean claims submitted by or on behalf of
pharmacies within 14 days for electronic claims and within 30 days for claims
submitted otherwise. 42 CFR §423.505(i)(3)(vi)
For those contracts that use a standard for reimbursement, a provision
indicating the source used by the Part D sponsor for the standard of
reimbursement. 42 CFR §423.505(i)(3)(viii)(B)
If the source for any prescription drug pricing standard is not publicly
available, a provision for disclosing all individual drug prices to be updated to
the applicable pharmacies in advance of their use for reimbursement of
claims. 42 CFR §423.505(i)(3)(vii).
For those contracts that use a standard for reimbursement, a provision that
updates to such a standard occur not less frequently than once every 7 days
beginning with an initial update on January 1 of each year, to accurately
reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A)
Language requiring the network pharmacy to submit claims to the Part D
sponsor or first tier, downstream or related entity whenever the membership
ID card is presented or on file at the pharmacy unless the enrollee expressly
requests that a particular claim not be submitted. 42 CFR §423.120(c)(3)
Provisions governing submitting claims to a real-time claims adjudication
system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain
pharmacies that are allowed to submit claims in the X 12 format that these
may be batch processed.
Provisions governing providing Part D enrollees access to negotiated prices
as defined in 42 CFR 423.100. 42 CFR §423.104(g)

120

Requirement

Citation

Provisions regarding charging/applying the correct cost-sharing amount. 42
CFR §423.104
Provisions governing informing the Part D enrollee at the point of sale (or at
the point of delivery for mail order drugs) of the lowest-priced, generically
equivalent drug, if one exists for the beneficiary's prescription, as well as any
associated differential in price. 42 CFR §423.132.
Provisions ensuring that before dispensing home infusion drugs, pharmacy
ensures that the professional services and ancillary supplies are in
place.423.120(a)(4)(iii)
Provisions ensuring that a pharmacy that delivers home infusion drugs
provides delivery of home infusion drugs within 24 hours of discharge from
an acute care setting, or later if so prescribed. 423.120(a)(4)(iv)

121

APPENDIX XIV – Crosswalk for Long-Term Care Pharmacy Access
Contracts
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains applicable Section 3.1.1D requirements AND additional requirements
specific to Pharmacy Access) for each Long-Term Care pharmacy contract template
submitted under Section 3.10. Applicants must identify where specifically (i.e., the .pdf
page number) in each contract template the following elements are found.
The provisions listed below must be in all pharmacy contracts. If contracts
reference policies and procedures with which the pharmacy must comply,
provide the relevant documentation as evidence and cite this documentation
accordingly.
Requirement

Citation

The functions to be performed by the first tier, downstream, or related entity,
and describes the reporting requirements the first tier, downstream, or related
entity identified in 3.1.1C of the application has to the Applicant. 42 CFR
§423.505(i)(4)(i)
Language obligating the first tier, downstream, or related entity to abide by all
applicable Federal laws and regulations and CMS instructions. 42 CFR
§423.505(i)(4)(iv)
Language obligating the first tier, downstream, or related entity to abide by
State and Federal privacy and security requirements, including the
confidentiality and security provisions stated in the regulations for the
program at 42 CFR §423.136. 42 CFR §423.136
Language ensuring that the first tier, downstream, or related entity will make
its books and other records available in accordance with 42 CFR
423.505(e)(2) and 42 CFR 423.505(i)(2). Generally stated these regulations
give HHS, the Comptroller General, or their designees the right to audit,
evaluate and inspect any books, contracts, records, including medical
records and documentation involving transactions related to CMS’ contract
with the Part D sponsor and that these rights continue for a period of 10
years from the final date of the contract period or the date of audit
completion, whichever is later. 42 CFR §423.505
Language stating that the first tier, downstream, or related entity will ensure
that beneficiaries are not held liable for fees that are the responsibility of the
Applicant. 42 CFR §423.505(i)(3)(i)

122

Requirement

Citation

Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or related
entity, that such activity or responsibility may be revoked if CMS or the Part D
sponsor determines the first tier, downstream, or related entity has not
performed satisfactorily. Note: The contract may include remedies in lieu of
revocation to address this requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity on
an ongoing basis. 42 CFR §423.505(i)(4)(iii)
For those contracts that use a standard for reimbursement, a provision
indicating the source used by the Part D sponsor for the standard of
reimbursement. 42 CFR §423.505(i)(3)(viii)(B)
If the source for any prescription drug pricing standard is not publicly
available, a provision for disclosing all individual drug prices to be updated to
the applicable pharmacies in advance of their use for reimbursement of
claims. 42 CFR §423.505(i)(3)(vii).
For those contracts that use a standard for reimbursement, a provision that
updates to such a standard occur not less frequently than once every 7 days
beginning with an initial update on January 1 of each year, to accurately
reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A)
Language requiring the network pharmacy to submit claims to the Part D
sponsor or first tier, downstream or related entity whenever the membership
ID card is presented or on file at the pharmacy unless the enrollee expressly
requests that a particular claim not be submitted. 42 CFR 423.120(c)(3)
Provisions governing submitting claims to a real-time claims adjudication
system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain
pharmacies that are allowed to submit claims in the X 12 format that these
may be batch processed.
Provisions governing providing Part D enrollees access to negotiated prices
as defined in 42 CFR 423.100. 42 CFR §423.104(g)
Provisions regarding charging/applying the correct cost-sharing amount. 42
CFR §423.104

123

Requirement

Citation

Provisions governing informing the Part D enrollee at the point of sale (or at
the point of delivery for mail order drugs) of the lowest-priced, generically
equivalent drug, if one exists for the beneficiary's prescription, as well as any
associated differential in price. 42 CFR §423.132
Provide that long-term care pharmacies must have not less than 30 days, nor
more than 90 days, to submit to the Part D Sponsor claims for
reimbursement under the plan. 42 CFR § 423.504(b)(20)
Provisions requiring that long-term care pharmacies dispense drugs and
report information as required by 42 CFR §423.154.

124

APPENDIX XV – Crosswalk for Indian Tribe and Tribal Organization, and
Urban Indian Organization (I/T/U) Pharmacy Access Contracts
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart
(which contains applicable Section 3.1.1D requirements AND additional requirements
specific to Pharmacy Access) for each I/T/U pharmacy contract template submitted
under Section 3.11. Applicants must identify where specifically (i.e., the .pdf page
number) in each contract template the following elements are found.
The provisions listed below must be in all pharmacy contracts. If contracts
reference policies and procedures with which the pharmacy must comply,
provide the relevant documentation as evidence and cite this documentation
accordingly.
Requirement

Citation

125

Requirement

Citation

Language ensuring that if the Applicant, upon becoming a Part D sponsor,
delegates an activity or responsibility to the first tier, downstream, or related
entity, that such activity or responsibility may be revoked if CMS or the Part
D sponsor determines the first tier, downstream, or related entity has not
performed satisfactorily. Note: The contract may include remedies in lieu of
revocation to address this requirement. 42 CFR §423.505(i)(4)(ii)
Language specifying that the Applicant, upon becoming a Part D sponsor,
will monitor the performance of the first tier, downstream, or related entity on
an ongoing basis. 42 CFR §423.505(i)(4)(iii)
Provisions requiring that payment shall be issued, mailed or otherwise
transmitted with respect to all clean claims submitted by or on behalf of
pharmacies within 14 days for electronic claims and within 30 days for claims
submitted otherwise. 42 CFR §423.505(i)(3)(vi)
For those contracts that use a standard for reimbursement, a provision
indicating the source used by the Part D sponsor for the standard of
reimbursement. 42 CFR §423.505(i)(3)(viii)(B)
If the source for any prescription drug pricing standard is not publicly
available, a provision for disclosing all individual drug prices to be updated to
the applicable pharmacies in advance of their use for reimbursement of
claims. 42 CFR §423.505(i)(3)(vii).
For those contracts that use a standard for reimbursement, a provision that
updates to such a standard occur not less frequently than once every 7 days
beginning with an initial update on January 1 of each year, to accurately
reflect the market price of acquiring the drug.42 CFR §423.505(i)(3)(viii)(A)
Language requiring the network pharmacy to submit claims to the Part D
sponsor or first tier, downstream or related entity whenever the membership
ID card is presented or on file at the pharmacy unless the enrollee expressly
requests that a particular claim not be submitted. 42 CFR §423.120(c)(3)
Provisions governing submitting claims to a real-time claims adjudication
system. 42 CFR §423.505(j) and §423.505(b)(17)
Note: Applicant may indicate for I/T/U pharmacies and for certain
pharmacies that are allowed to submit claims in the X 12 format that these
may be batch processed.
Provisions governing providing Part D enrollees access to negotiated prices
as defined in 42 CFR 423.100. 42 CFR §423.104(g)

126

Requirement

Citation

Provisions regarding charging/applying the correct cost-sharing amount. 42
CFR §423.104
Elements Specific to Indian Tribe and Tribal Organization, and Urban Indian
Organization (I/T/U) Pharmacy Contracts
Note: Provisions listed below are in the model I/T/U Addendum, located at
Appendix XVII and at http://www.cms.gov/PrescriptionDrugCovContra/ and all I/T/U
Contracts must contain language consistent with the model addendum that
addresses the following.
Item
Number

Description

Citation

Item 1

Supersession of the addendum from underlying agreement.

Item 3

The description of the provider.

Item 4

Counting of costs paid for by provider toward any deductibles.

Item 5

Persons eligible for services of the provider.

Item 6

The applicability of certain Federal law.

Item 7

The non-taxable status of the provider.

Item 8

Insurance and indemnification.

Item 9

Applicability of state licensing law to provider’s employees.

Item 10

Provider eligibility for payments

Item 11

Dispute resolution.

Item 12

Federal law as the governing law.

Item 13

The contract will apply to all pharmacies and dispensaries
operated by the provider.

Item 14

The contract will not affect the provider’s acquisition of
pharmaceuticals.

Item 15

The provider’s point of sale processing capabilities.

127

Item
Number

Description

Citation

Item 16

Claims processing.

Item 17

Reasonable and appropriate payment rates.

Item 18

Any information, outreach or enrollment materials prepared by
the Applicant will be supplied at no cost to the provider.

Item 19

The provider determines the hours of service for the pharmacies
or dispensaries of the provider.

Item 20

Endorsement

Item 21

Sovereign Immunity

128

APPENDIX XVI – Applicant Submission of P&T Committee Member List
and Certification Statement
This appendix summarizes CMS policy on Part D Applicant/Sponsor and PBM
submission of P&T Committee membership, and the accountability that each Part D
Applicant/Sponsor holds regarding the integrity of the P&T Committee whose
membership is submitted either directly by the Part D Applicant/Sponsor or by the
applicant/sponsor’s PBM. This appendix also instructs Part D Applicants (or their
PBM’s) on how to submit the Applicant’s P&T Committee membership list, and a
Certification of P&T Integrity and Quality in the event the Applicant is planning to
operate under a confidentiality agreement with its PBM (such that the PBM does not
disclose the membership to the Applicant).
I. P&T Committee Member Disclosure to CMS
As provided in the regulation at 42 CFR 423.120(b)(1), a Part D Sponsor’s P&T
Committee list must contain a majority of members who are practicing physicians and/or
pharmacists, include at least one practicing physician and one practicing pharmacist
who are experts regarding care of the elderly or disabled individuals, and includes at
least one practicing physician and one practicing pharmacist who are independent and
free of conflict relative to the Part D Sponsor or Plan and pharmaceutical
manufacturers.
In the event the Part D Applicant/Sponsor has entered into a confidential agreement
such that the PBM will not disclose its P&T Committee membership to the Part D
Applicant/Sponsor, then it is the Part D Sponsor’s responsibility to notify CMS that this
information will be submitted by the Sponsor’s PBM. Moreover, the Part D
Applicant/Sponsor must ensure that the PBM notifies CMS of the P&T Committee
membership. Also, the Part D Applicant/Sponsor should ensure that the PBM notifies
the Sponsor that this information has been successfully submitted to CMS.
II. Instructions to Plans and PBMs
A. If the Part D Applicant sub-contracts with a PBM for its P&T Committee and

operates under a Confidentiality Agreement (such that its members are not
disclosed to the Part D Applicant) then the Applicant must (1) complete the attached
Certification in HPMS, and (2) forward the attached P&T Committee Member
Disclosure form to the sub-contracted PBM and direct the PBM to submit the form to
CMS by the application due date. The PBM should email the P&T Committee
Member Disclosure form to the following email box:
[email protected].

B. In the event of any future changes to the membership of the Part D Sponsor’s P&T

Committee or the PBM’s P&T Committee, Part D Sponsors must (or in the case of a
confidential agreement the Part D Sponsor) assure that the PBM will notify the
appropriate CMS account manager (to be assigned at a future date) and make the
129

correct changes in HPMS on the Contract Management/Part D Data page within 30
days of the effective date of such change.
III. PHARMACY AND THERAPEUTICS COMMITTEE MEMBER DISCLOSURE
PBM must email the following form to [email protected] by the
application due date.
Name of Part D Plan or PBM:
If Part D Plan, provide Part D Contract number(s):
Contact Person:
Phone Number:
Email:
A. Complete the table below.

PROVIDE THE NAMES OF THE MEMBERS OF YOUR ORGANIZATION’S P&T
COMMITTEE. INDICATE WHICH MEMBERS ARE PRACTICING PHYSICIANS OR
PRACTICING PHARMACISTS. FURTHER, INDICATE WHICH MEMBERS ARE
EXPERTS IN THE CARE OF THE ELDERLY OR DISABLED, AND FREE OF ANY
CONFLICT OF INTEREST WITH YOUR ORGANIZATION AND PHARMACEUTICAL
MANUFACTURERS. (APPLICANTS SHOULD MARK THE INFORMATION AS
PROPRIETARY.) SUBMIT THIS DATA BY CREATING A SPREADSHEET IN
MICROSOFT EXCEL THAT MIMICS THE TABLE BELOW.
Full Name of
Member
Start Date and
End Date

Practicin Practicing Elderly/Disa
g
Pharmacis bled Expert
Physician t

130

Free of Any
Conflict of
Interest
With Your
Organizatio
n?

Free of Any
Conflict of
Interest With
Pharmaceutical
Manufacturers?

B. Complete the table below if a PBM submitting on behalf of Part D plan.

PROVIDE THE NAMES OF THOSE APPLICANTS FOR THE PART D BENEFIT FOR
WHICH YOUR ORGANIZATION IS PROVIDING PHARMACY BENEFIT
MANAGEMENT SERVICES, THE TYPE OF APPLICATION, AND THE CONTRACT
NUMBER(S). ADD ADDITIONAL ROWS AS NECESSARY.
Organization Name

Type of Application

131

Contract Number(s)

Applicant must upload in HPMS:
CERTIFICATION FOR PART D SPONSORS USING A PHARMACY BENEFIT
MANAGER’S PHARMACY& THERAPEUTICS COMMITTEE UNDER A
CONFIDENTIALITY AGREEMENT
I, attest, on behalf of LEGAL NAME OF PART D SPONSOR APPLICANT (“Applicant”),
to the following:
I certify that APPLICANT has entered into a contract with LEGAL NAME OF PBM
(“PBM”) to perform pharmacy benefit management services related to the operation of a
Medicare Part D benefit plan(s) on behalf of APPLICANT.
I agree, to the best of my knowledge, that “PBM,” has a Pharmacy and Therapeutics
(P&T) Committee that contains a majority of members who are practicing physicians
and/or pharmacists, includes at least one practicing physician and one practicing
pharmacist who are experts regarding the care of the elderly or disabled individuals,
and includes at least one practicing physician and one practicing pharmacist who are
independent and free of conflict relative to my plan and organization and
pharmaceutical manufacturers.
I agree that the PBM will supply to CMS the following information, including but not
limited to, the full legal name of each member of its P&T Committee designated as a
practicing physician or pharmacist specializing in elderly and/or disabled care. Each
member must also disclose any conflict of interest with my organization, and/or
pharmaceutical manufacturers.
I agree that my organization has policies and procedures to ensure and confirm the
ongoing integrity, qualifications and expertise of the PBM’s P&T Committee.
I agree that in the event CMS identifies a PBM’s P&T Committee member is listed on
the OIG exclusion list, my organization will be notified by CMS of such a problem. In
such an instance, my organization must assure that the PBM takes appropriate steps to
correct the problem or my organization will be at risk of being subject to a corrective
action plan and sanctions, depending on the nature of the problem.
I agree that CMS may inspect the records and premises of my organization or my
subcontractor (first tier, downstream and related entities) to ensure compliance with
the statements to which I have attested above.
I certify that I am authorized to sign on behalf of the Applicant.

132

Part D Applicant’s Contract Number:

Authorized Representative Name (printed)

Authorized Representative Signature

Title

Date (MM/DD/YYYY)

133

APPENDIX XVII – I/T/U Contract Addendum
Note: All Part D sponsors will be required to use the attached revised version of the
I/T/U Addendum.
Indian Health Addendum to Medicare Part D Plan Agreement
1. Purpose of Indian Health Addendum; Supersession.
The purpose of this Indian Health Addendum is to apply special terms and conditions to
the agreement by and between
(herein “Part D
Sponsor”) and
(herein “Provider”) for administration
of Medicare Prescription Drug Benefit program at pharmacies and dispensaries of
Provider authorized by the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003, and implementing regulations in Parts 403, 411, 417, 422,
and 423 of Title 42, Code of Federal Regulations. To the extent that any provision of
the Part D Sponsor’s agreement or any other addendum thereto is inconsistent with any
provision of this Indian Health Addendum, the provisions of this Indian Health
Addendum shall supersede all such other provisions.
2.

Definitions.

For purposes of the Part D Plan Sponsor's agreement, any other addendum thereto,
and this Indian Health Addendum, the following terms and definitions shall apply:
(a) The term "Part D Plan Sponsor" means a nongovernmental entity that is
certified under 42 CFR 417.472, 42 CFR Part 423 or 42 CFR Part 422 as meeting the
requirements and standards that apply to entities that offer Medicare Part D plans.
(b) The terms "Part D Plan" means prescription drug coverage that is offered
under a policy, contract, or plan that has been approved as specified in 42 CFR
423.272, 42 CFR 422.502 or 42 CFR 417.472 and that is offered by a PDP sponsor that
has a contract with the Centers for Medicare and Medicaid Services that meets the
contract requirements under subpart K of 42 CFR Part 423 or subpart K of 42 CFR Part
422.
(c) The term "Provider" means the Indian Health Service (IHS) and all
pharmacies and dispensaries operated by the IHS, or an Indian tribe, tribal organization
or urban Indian organization which operates one or more pharmacies or dispensaries,
and is identified by name in Section 1 of this Indian Health Addendum.
(d) The term "Centers for Medicare and Medicaid Services" means the agency
of that name within the U.S. Department of Health and Human Services.
(e) The term "Indian Health Service" means the agency of that name within the
U.S. Department of Health and Human Services established by Sec. 601 of the Indian
Health Care Improvement Act (“IHCIA”), 25 USC §1661.
(f) The term "Indian tribe" has the meaning given that term in Sec. 4 of the
IHCIA, 25 USC §1603.

134

(g) The term "tribal organization" has the meaning given than term in Sec. 4 of
the IHCIA, 25 USC §1603.
(h) The term "urban Indian organization" has the meaning given that term in Sec.
4 of the IHCIA, 25 USC §1603.
(i) The term "Indian" has the meaning given to that term in Sec. 4 of the IHCIA,
25 USC §1603.
(j) The term "dispensary" means a clinic where medicine is dispensed by a
prescribing provider.
3.

Description of Provider.

The Provider identified in Section 1 of this Indian Health Addendum is (check
appropriate box):
/_/ IHS operated health care facilities located within the geographic area
covered by the Provider Agreement, including hospitals, health centers and one
or more pharmacies or dispensaries (“IHS Provider”). Where an IHS Provider
operates more than one pharmacy or dispensary all such pharmacies and
dispensaries are covered by this Addendum.
/_/ An Indian tribe that operates a health program, including one or more
pharmacies or dispensaries, under a contract or compact with the Indian Health
Service issued pursuant to the Indian Self-Determination and Education
Assistance Act, 25 USC §450 et seq.
/_/ A tribal organization authorized by one or more Indian tribes to operate a
health program, including one or more pharmacies or dispensaries, under a
contract or compact with the Indian Health Service issued pursuant to the Indian
Self-Determination and Education Assistance Act, 25 USC §450 et seq.
/_/ An urban Indian organization that operates a health program, including one or
more pharmacies or dispensaries, under a grant from the Indian Health Service
issued pursuant to Title V of the IHCIA.
4.

Deductibles; Annual Out-of-Pocket Threshold.

The cost of pharmaceuticals provided at a pharmacy or dispensary of Provider
or paid for by the Provider through a referral to a retail pharmacy shall count toward the
deductible and the annual out-of-pocket threshold applicable to an IHS beneficiary
enrolled in a Part D Plan.
5.

Persons eligible for services of Provider.

(a) The parties agree that the IHS Provider is limited to serving eligible IHS
beneficiaries pursuant to 42 CFR Part 136 and section 813(a) and (b) of the IHCIA, 25
USC §1680(a) and (b), who are also eligible for Medicare Part D services pursuant to
Title XVIII, Part D of the Social Security Act and 42 CFR Part 423. The IHS Provider
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may provide services to non-IHS eligible persons only under certain circumstances set
forth in IHCIA section 813(c) and in emergencies under section 813(d) of the IHCIA.
(b) The parties agree that the persons eligible for services of the Provider who is
an Indian tribe or a tribal organization or a Provider who is an urban Indian organization
shall be governed by the following authorities:
(1) Title XVIII, Part D of the Social Security Act and 42 CFR Part 423;
(2) IHCIA sections 813, 25 USC §1680c;
(3) 42 CFR Part 136; and
(4) The terms of the contract, compact or grant issued to the Provider by the
IHS for operation of a health program.
(c) No clause, term or condition of the Part D Plan Sponsor's agreement or any
addendum thereto shall be construed to change, reduce, expand or alter the eligibility of
persons for services of the Provider under the Part D Plan that is inconsistent with the
authorities identified in subsection (a) or (b).
6.

Applicability of other Federal laws.

Federal laws and regulations affecting a Provider include but are not limited to the
following:
(a) An IHS provider:
(1)

The Anti-Deficiency Act 31 U.S.C. § 1341;

(2)
The Indian Self Determination and Education Assistance Act
(“ISDEAA”); 25 USC § 450 et seq.;
(3)

The Federal Tort Claims Act (“FTCA”), 28 U.S.C. § 2671-2680;

(4)

The Federal Medical Care Recovery Act, 42 U.S.C. §§ 2651-2653;

(5)
The Federal Privacy Act of 1974 (“Privacy Act”), 5 U.S.C. § 552a,
45 CFR Part 5b;
Part 2;

(6)

Confidentiality of Alcohol and Drug Abuse Patient Records, 42 CFR

(7)
The Health Insurance Portability and Accountability Act of 1996
(“HIPAA”), 45 CFR Parts 160 and 164; and
(8)

The IHCIA, 25 U.S.C. § 1601 et seq.

(b) A Provider who is an Indian tribe or a tribal organization:
(1)

The ISDEAA, 25 USC §450 et seq.;

(2)

The IHCIA, 25 USC §1601, et seq.;

(3)

The FTCA, 28 USC §§2671-2680;

(4)

The Privacy Act, 5 USC §552a and regulations at 45 CFR Part 5b;

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(5)

The HIPAA and regulations at 45 CFR parts 160 and 164; and

(6)
Sec. 206(e)(3) of the IHCIA, 25 USC § 1624e(e)(3), regarding
recovery from tortfeasors.
(c) A Provider who is an urban Indian organization:
(1)

The IHCIA, 25 USC §1601, et seq.;

(2)

The Privacy Act, 5 USC §552a and regulations at 45 CFR Part 5b;

(3)

The HIPAA and regulations at 45 CFR parts 160 and 164; and

(4)
Sec. 206(e)(3) of the IHCIA, 25 USC §1621e(e)(3), regarding
recovery from tortfeasors, as made applicable to urban Indian organizations by
Sec. 206(i) of the IHCIA.
7.

Non-taxable entity.

To the extent the Provider is a non-taxable entity, the Provider shall not be required by a
Part D Plan Sponsor to collect or remit any Federal, State, or local tax.
8.

Insurance and indemnification.

(a) As an IHS provider, FTCA coverage obviates the requirement that IHS carry
private malpractice insurance as the United States consents to be sued in place of
federal employees for any damages to property or for personal injury or death caused
by the negligence or wrongful act or omission of federal employees acting within the
scope of their employment. 28 U.S.C. § 2671-2680. Nothing in the Part D Plan
Sponsor’s Agreement shall be interpreted to authorize or obligate any IHS employee to
perform any act outside the scope of his/her employment. The IHS Provider shall not be
required to acquire insurance, provide indemnification, or guarantee that the Plan will be
held harmless from liability.
(b) A Provider which is an Indian tribe or a tribal organization shall not be
required to obtain or maintain professional liability insurance to the extent such Provider
is covered by the Federal Tort Claims Act (FTCA) pursuant to Federal law (Pub.L. 101512, Title III, §314, as amended by Pub.L. 103-138, Title III, §308 (codified at 25 USC
§450 F note); and regulations at 25 CFR Part 900, Subpt. M. To the extent a Provider
that is an urban Indian organization is covered by the FTCA pursuant to section 224(g)(n) of the Public Health Service Act, as amended by the Federally Supported Health
Centers Assistance Act, Pub.L. 104-73, (codified at 42 USC §233(g)-(n)) and
regulations at 42 CFR Part 6, such Provider shall not be required to obtain or maintain
professional liability insurance. Further, nothing in the Part D Plan Sponsor’s
agreement or any addendum thereto shall be interpreted to authorize or obligate
Provider or any employee of such Provider to operate outside of the scope of
employment of such employee, and Provider shall not be required to indemnify the Part
D Plan Sponsor.

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Licensure.

(a) States may not regulate the activities of IHS-operated pharmacies nor
require that the IHS pharmacists be licensed in the State where they are providing
services, whether the IHS employee is working at an IHS-operated facility or has been
assigned to a pharmacy or dispensary of a tribe, tribal organization, or urban Indian
organization. The parties agree that during the term of the Part D Plan Sponsor’s
Agreement, IHS pharmacists shall hold state licenses in accordance with applicable
federal law, and that the IHS facilities where the pharmacies and dispensaries are
located shall be accredited in accordance with federal statutes and regulations. During
the term of the Part D Plan Sponsor’s Agreement, the parties agree to use the IHS
facility’s Drug Enforcement Agency (DEA) number consistent with federal law.
(b) Federal law (Sec. 221 of the IHCIA) provides that a pharmacist employed
directly by a Provider that is an Indian tribe or tribal organization is exempt from the
licensing requirements of the state in which the tribal health program is located,
provided the pharmacist is licensed in any state. Federal law (Sec. 408 of the IHCIA)
further provides that a health program operated by an Indian tribe or tribal organization
shall be deemed to have met a requirement for a license under state or local law if such
program meets all the applicable standards for such licensure, regardless of whether
the entity obtains a license or other documentation under such state or local law. The
parties agree that these federal laws apply to the Part D Plan Sponsor's Agreement and
any addenda thereto. This provision shall not be interpreted to alter the requirement that
a pharmacy hold a license from the Drug Enforcement Agency.
(c) To the extent that any directly hired employee of an urban Indian Provider is
exempt from State regulation, such employee shall be deemed qualified to perform
services under the Part D Plan Sponsor's agreement and all addenda thereto, provided
such employee is licensed to practice pharmacy in any State. Federal law (Sec. 408 of
the IHCIA) provides that a health program operated by an urban Indian organization
shall be deemed to have met a requirement for a license under state or local law if such
program meets all the applicable standards for such licensure, regardless of whether
the entity obtains a license or other documentation under such state or local law. This
provision shall not be interpreted to alter the requirement that a pharmacy hold a license
from the Drug Enforcement Agency.
10.

Provider eligibility for payments.

To the extent that the Provider is exempt from State licensing requirements, the
Provider shall not be required to hold a State license to receive any payments under the
Part D Plan Sponsor’s agreement and any addendum thereto.
11.

Dispute Resolution.

a.
For IHS Provider. In the event of any dispute arising under the Participating
Part D Plan Sponsor’s Agreement or any addendum thereto, the parties agree to meet
and confer in good faith to resolve any such disputes. The laws of the United States
shall apply to any problem or dispute hereunder that cannot be resolved by and
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between the parties in good faith. Notwithstanding any provision in the Part D Plan
Sponsor’s Agreement or any addendum thereto to the contrary, IHS shall not be
required to submit any disputes between the parties to binding arbitration.
b.
For Tribal and Urban Providers. In the event of any dispute arising under the
Participating Part D Plan Sponsor’s Agreement or any addendum thereto, the parties
agree to meet and confer in good faith to resolve any such disputes. Any dispute
hereunder that cannot be resolved by and between the parties in good faith shall be
submitted to the dispute resolution procedure pursuant to the Participating Part D Plan
Sponsor’s Agreement.
12.

Governing Law.

The Part D Plan Sponsor's agreement and all addenda thereto shall be governed and
construed in accordance with Federal law of the United States. In the event of a conflict
between such agreement and all addenda thereto and Federal law, Federal law shall
prevail. Nothing in the Part D Plan Sponsor's agreement or any addendum thereto shall
subject an Indian tribe, tribal organization, or urban Indian organization to State law to
any greater extent than State law is already applicable.
13.

Pharmacy/Dispensary Participation.

The Part D Plan Sponsor's agreement and all addenda thereto apply to all pharmacies
and dispensaries operated by the Provider, as listed on the attached Schedule -------- to
this Indian Health Addendum. A pharmacy is required to use a National Provider
Identifier (NPI) number.
14.

Acquisition of Pharmaceuticals.

Nothing in the Part D Plan Sponsor's agreement and all addenda thereto shall affect the
Provider’s acquisition of pharmaceuticals from any source, including the Federal Supply
Schedule and participation in the Drug Pricing Program of Section 340B of the Public
Health Service Act. Nor shall anything in such agreement and all addenda thereto
require the Provider to acquire drugs from the Part D Plan Sponsor or from any other
source.
15.

Drug Utilization Review/Generic Equivalent Substitution.

Where the Provider lacks the capacity to comply with the information technology
requirements for drug utilization review and/or generic equivalent substitution set forth in
the Part D Plan Sponsor's agreement, the Provider and Part D Plan Sponsor agree that
the Provider shall comply with the Part D Plan Sponsor's drug utilization review and/or
generic equivalent substitution policies and procedures through an alternative
method. Nothing in this paragraph shall be interpreted as waiving the applicability of the
drug utilization review and/or generic equivalent substitution policies and procedures
adopted by Part D sponsor in accordance with 42 C.F.R.§§ 423.153(b) and (c), as
139

approved by CMS, to covered Part D drugs dispensed by the Provider to enrollees in
the Part D Plan[s]. As specified at 42 C.F.R. §423.132(c)(3), the requirements related
to notification of price differentials is waived for the Provider.
16.

Claims.

The Provider may submit claims to the Part D Plan by telecommunication through an
electronic billing system or by calling a toll-free number for non-electronic claims; in the
case of the latter, Provider shall submit a confirmation paper claim.
17.

Payment Rate.

Claims from the provider shall be paid at rates that are reasonable and appropriate.
18.

Information, Outreach, and Enrollment Materials.

(a) All materials for information, outreach, or enrollment prepared for the Part D
Plan shall be supplied by the Part D Plan Sponsor to Provider in paper and electronic
format at no cost to the Provider.
(b) All marketing or informational material listing a provider as a pharmacy must
refer to the special eligibility requirements necessary for service to be provided,
consistent with the eligibility requirements as described in this Indian health addendum
in paragraphs 5(a) for IHS providers and 5(b) for tribal and urban providers.
19.

Hours of Service.

The hours of service of the pharmacies or dispensaries of Provider shall be established
by Provider. At the request of the Part D Plan Sponsor, Provider shall provide written
notification of its hours of service.
20.

Endorsement

An endorsement of a non-Federal entity, event, product, service, or enterprise may be
neither stated nor implied by the IHS provider or IHS employees in their official
capacities and titles. Such agency names and positions may not be used to suggest
official endorsement or preferential treatment of any non-Federal entity under this
agreement.
21.

Sovereign Immunity

Nothing in the Part D Plan Sponsor’s Agreement or in any addendum thereto shall
constitute a waiver of federal or tribal sovereign immunity.

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Signature of Authorized Representative
Representative

Title of Authorized Representative

141

Printed Name of Authorized

APPENDIX XVIII – Compliance Program Crosswalk
INSTRUCTIONS: Applicants must complete and upload in HPMS the following chart,
which contains the required elements for a Compliance Plan. Applicant must identify
specifically (i.e., the .pdf page number) where in its compliance plan the following
elements are located.
Compliance Plan Elements
A. Applicant’s legal entity name
B. Explicit statement indicating that the compliance plan
applies to Medicare Part D (and Part C if an MA-PD applicant)
C. Written policies, procedures, and standards of conduct must
include the following components in 42 CFR
§423.504(b)(4)(vi)(A):
1. Articulate the applicant’s commitment to comply with all applicable
Federal and State standards.
2. Describe compliance expectations as embodied in the standards
of conduct.
3. Describe the implementation and operation of the compliance
program.
4. Provide guidance to employees and others on dealing with
potential compliance issues.
5. Identify how to communicate compliance issues to appropriate
compliance personnel.
6. Describe how potential compliance issues will be investigated and
resolved by the applicant.
7. Include a policy of non-intimidation and non-retaliation for good
faith participation in the compliance program, including, but not
limited to, reporting potential issues, investigating issues,
conducting self-evaluations, audits and remedial actions, and
reporting to appropriate officials.
D. Measures that prevent, detect, and correct fraud, waste, and
abuse. (42 CFR § 423.504(b)(4)(vi))

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Page and paragraph
where element
located

Compliance Plan Elements
E. Measures that prevent, detect, and correct noncompliance
with CMS’ program requirements. (42 CFR § 423.504(b)(4)(vi))
F. Designate a compliance officer and a compliance committee
who report directly to and are accountable to applicant’s chief
executive or senior management and include the following three
components in 42 CFR §423.504(b)(4)(vi)(B):
1. The compliance officer, vested with the day-to-day operations of
the compliance program, must be an employee of the applicant,
parent organization or corporate affiliate. The compliance officer
may not be an employee of the applicant’s first tier, downstream
or related entity.
2. The compliance officer and the compliance committee must
periodically report directly to the governing body of the applicant
on the activities and status of the compliance program, including
issues identified, investigated, and resolved by the compliance
program.
3. The governing body of the applicant must be knowledgeable
about the content and operation of the compliance program and
must exercise reasonable oversight with respect to the
implementation and effectiveness of the compliance programs.
G. Establish, implement and provide effective training and
education for employees including the chief executive and
senior administrators or managers, and governing body
members must include the following components in 42 CFR §
423.504(b) (4)(vi)(C):
1. Training and education must occur at least annually and must be
part of the orientation for new employees, including the chief
executive and senior administrators or managers; and governing
body members.,

143

Page and paragraph
where element
located

Compliance Plan Elements
H. Establish and implement effective lines of communication,
ensuring confidentiality, as described in in 42 CFR §
423.504(b) (4)(vi)(D):
1. The compliance officer, members of the compliance committee,
the applicant’s employees, managers and governing body.
2. The applicant’s first tier, downstream, and related entities.
3. The lines of communication (e.g., free telephone hotlines) must be
accessible to all, including first tier, downstream, and related
entities.
4. Include a method for anonymous and confidential good faith
reporting of potential compliance issues, as they are identified.
I. Well-publicized disciplinary standards and implementation of
procedures, which encourage good faith participation in the
compliance program by all individuals. These standards must
include the following policies per 42 CFR § 423.504(b) (4)(vi)(E):
1. Expectations for reporting compliance issues and assisting in their
resolution.
2. Identify non-compliant or unethical behavior.
3. Provide for timely, consistent, and effective enforcement of the
standards when noncompliance or unethical behavior is
determined.

144

Page and paragraph
where element
located

Compliance Plan Elements
J. Establish and implement an effective system for routine
monitoring and identification of compliance risks. The system
should include: internal monitoring and audits and, as
appropriate, external audits, to evaluate the applicant, including
first tier entities’, compliance with CMS requirements and the
overall effectiveness of the compliance program. 42 CFR §
423.504(b) (4)(vi)(F)
K. Establish and implement procedures and a system for
promptly responding to compliance issues as they are raised,
investigating potential compliance problems identified in the
course of self-evaluations and audits, correcting such problems
promptly and thoroughly to reduce the potential for recurrence,
and ensure ongoing compliance with CMS requirements. The
procedures must include the following components per 42 CFR
§ 423.504(b) (4)(vi)(G):
1. If the applicant discovers evidence of misconduct related to
payment or delivery of items or services under the contract, it
must conduct a timely, reasonable inquiry into that conduct.
2. The applicant must conduct appropriate corrective actions (e.g.,
repayment of overpayments and disciplinary actions against
responsible individuals) in response to a potential violation of item
1, above.
3. The applicant should have procedures to voluntarily self-report
potential fraud or misconduct related to the Medicare program to
CMS or its designee.

145

Page and paragraph
where element
located

File Type	application/pdf
File Title	2024 Part D Application 30 Day PRA
Author	CMS
File Modified	2022-09-28
File Created	2022-09-27